Many small business owners are having a difficult time understanding the direction of our economy. The national media, in most cases, paint an optimistic future. Our Government leaders keep telling us how well we are doing. As a small business person, you sometimes have to do your own economic forecast.
I am advocating a direction of hard work, intensive marketing and holding a cash reserve for both the family and the business. You have to understand, first, your local economy, which in most cases is your target market. The general population will always have a need for the basic necessities of life. Does your business provide them? Knowing your market and the needs of that market is critical for survival.
A business owner can grow, with a clear direction of what is needed and with a plan to take that business into the market place to satisfy the needs.
There are a few issues of concern:
- The growing number of people that can afford to make mortgage payments, but give their home back to the lender because the home is worth less then the existing loan. At the present time, most lenders are just accepting the home, not going after the borrower, and discounting the homes thus causing a further drop in value. This may become a vicious cycle without a solution; at this point, none of our elected officials are addressing this issue.
- Another issue, is the fact that baby boomers are reaching retirement age. Their needs will change as many may have counted on their home equity as part of their retirement. With the loss in home values and the loss in the market, these people will have different needs than they originally anticipated.
- Lenders are doing everything in their power not to lend their money, either to small businesses or many home buyers.
Understand the needs of your market and position your firm to fill those needs. That is where the future growth is.Employment will grow if you grow your business.
The future belongs to those who believe in the beauty of their dreams.