Profiting in these Strong Markets

Try on these 2019 market stats for size:

  • Since January 1st, all major stock indices are significantly up – as of Tuesday’s close the the Dow Jones and S&P 500 11% and the NASDAQ 13%.

  • Consumer sentiment has taken a significantly positive tick forward, “reflecting the end of the partial government shutdown as well as a more fundamental shift due to the Fed’s pause in raising interest rates”

  • The U.S. economy added 304,000 jobs in January and unemployment remains near a 48-year low of 4.1%.

  • Economic Confidence – after taking a dip late last year – this month rebounded to its highest levels since 2001, with 57% of Americans rating the economy as “good or excellent.”

What does all this good sentiment mean for your business?

In a word, opportunity.

For faster growth and greater profits.

And for an accelerated path to a business sale and exit.

But opportunity is just that – an exciting but ephemeral thing that when not pursued disappears as competitors rush in and take what should be ours.

To keep this from happening, look to do these four things:

#4. Raise Prices. When widely held assets like stocks and real estate rise, there builds into every market a class of consumers flush wealth and liquidity…

…and thus less price sensitive.

So very often our lowest hanging business fruit is to just give these prosperous customers VIP purchase and consumption experiences at..VIP, higher prices.

#3. Raise Capital. When the overall economy is performing well, investors in general become less risk averse, which in turn makes it easier for more speculative investment propositions – like private companies seeking growth capital – to be evaluated on their individual merits versus more of a blanket “risk anxiety” as is typical in more normal markets.

Raising money will always be hard, but right now the combination of general market and business confidence make it as easy as it will ever be.

#2. Build Intangible Assets.  So much of our business day is spent on revenue and costs – i.e. generating the most possible sales at the least possible cost to pay the rent, meet payroll, keep the lights on, etc.

This is mostly as it should be, but in an environment like this where public companies are trading at multiples of 21 times earnings and 2.1 times revenues, it pays to build the kind of intangible assets that “flutter the hearts” of key business stakeholders – investors for sure but employees, contractors, partners and vendors and too.

What are these intangible assets?

Well, for starters, our moving forward business and strategic plan, i.e. our vision of what the future of our industry and market will be, and then what our role in it will be.

Then relatedly, strengthening and boosting our brand and company culture.

And finally, becoming better innovators – more agile and effective in response to fast-moving markets and competitors.

#1. Work Harder. As I talked about last week in my post on Tom Brady and Phil Mickelson, hard work is a value in itself and a condition for meaningful success in any market or economy.

But in economic good times, the cost not working hard just goes up and up.

We can rest when markets cool, but right now let’s think, plan and work aggressively…and get our share of this solid boomtime market.

Need to Accelerate your Growth Efforts?

Do you agree that times are good but just can’t seem to “get out of your own way” to take advantage?

Need a burst of energy, ideas, and vision to get your business unstuck?

If so, we should talk.

Click here and tell us a bit about your current situation and key business goals now.

And we’ll reach out with our thoughts to help you.

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