Medicine For Small Business
Medicine For Small Business
Last month Warren Buffet stated the recession will not be over until the Gross Domestic Product (GDP) rises back to the levels before the recession began. Well, if that is the case we have a while to go. The GDP EX0-105 before the recession was $14.062 Trillion ($13.229 in 2005 dollars) and the current GDP is $14.119 Trillion, but only $12.881 Trillion when valued in 2005 dollars. Depending on our growth rate (1% – 2%), we will not be out of the recession in Warren Buffet’s eyes until June 2011 to June 2012! Additionally, this shows that the GDP in dollars is growing, but the real amount of “stuff” we produce is less. Interesting contradiction and it shows the power of currency devaluation. It also shows that the economy make by sick for a long time. What medicines are available to your business?
Additionally, the environment is tough! It’s been tough for years, like a cold you cannot shake. Perhaps it was tougher before you realized it, like a cold you try to fight off and then you wake up and you are down for the count.
Americans had a slight cold which started decades ago. The amount of household debt slowly, but steadily increased against household income. Did you know that at the height of our “consumption bubble” Americans spent $1.60 for every $1.00 they earned? That is not healthy for our economy nor for our net worth! What medicines can we take to improve our financial position?
Prescription #1 – Live Within (Below) Your Means: Ouch! Medicine does hurt! Can you cut costs (the price of something) without destroying value? Can you go back to eating Mac n’ Cheese instead of steak? Once you are able to begin living below your means you can use your savings to rebuild your financial position by reducing debts and build your savings! You might not realize how tasty Mac n’ Cheese is again and realize that it is the little things in life, as opposed to the most expensive things, make the difference.
Prescription #2 – Exercise: Exercise strengthens your body. You strengthen your muscles by repeating a motion time and time again. You can even challenge yourself by adding weight and distance. We need to exercise financially too! This means we must save and save some more; and learn more about finances. As business owners you can learn about the interactions of your Profit and Loss Statement and your Balance Sheet. This will let you understand your financial position and cash flow better. Your financial exercise will strengthen your net worth!
Prescription #3 – Be Creative: “If it ain’t broke, don’t fix it!” is an old saying which you might have heard before. Although you want to agree with it at first, don’t! We need to be leaders who drive change for a better future; not managers who just make sure the same thing is done over and over again. Plus, when was the last time you did the same thing over and over and received better results? To survive the current economic EX0-101 challenges we must strap on our thinking caps and find new solutions!
Prescription #4 – Be Courageous: Any way you measure it fear, stress and frustration are at decade highs. We are beat up mentally due to life challenges and physically due to stress. However, we must not be afraid to seek out opportunities and new markets. Stay grounded to reality, form a plan and execute on opportunities. Don’t let fear hold you back from reaching the next level or achieving your dreams.
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