Working Through the Crisis

In the spirit of focus on a solution, rather than the problem:

Here are my top five things a small business should prioritize in the coming week default or no.

• Know where you stand on important metrics.  (If you’re a QuickBooks User here are some thoughts on how to implement this advice.) When times are tough, it’s critical to understand how you are doing compared to plan.
  • Focus on collections, cash on hand and expenses. 

•  Know where your employees stand.  There’s been a lot of talk about how tough things are for small business owners, but it hasn’t been a picnic for employees either.  A new study by Met Life shows  44% of small business employees feel loyal to their employer – that’s down from 62% in 2008.  More than half of employers (54%) think their employees have a strong sense of loyalty to the firm.  A little more than a third of small business employees report they would rather be working somewhere else right now.

• What would you do if a critical person walked out the door? 

• Cash has been king for a while, but clearly it’s even more relevant than ever this week.  For capital intensive business it’s time to make sure you’re on top of either inventory or the lease / buy question.  Professional services want to monetize time.
  • If you don’t have a set of tasks that keep you apprised of key cash flow metrics (see #1) make sure that gets on your calendar ASAP.

•  Find out what other businesses are doing to cope.  There is no play book for this level of lingering economic stress combined with dynamic marketplace change.  If you have a circle of trusted advisors, continue to utilize that resource.  I’d also find out what you can about competitors, and consider giving some time to “hate-surfing”. 

• The whole idea is to find out perspectives that won’t naturally occur to you. 

•  Make sure your record keeping is where it should be.  If this year isn’t going to go as planned, knowing when you went off course is a big help.  If you think you don’t have time now, think how much less time you’ll have if you’re dealing with (insert name of unexpected crisis). 

Opportunities beyond Workation

I’m writing this looking out on Long Island sound on my Fourth of July get away.  According to the commercial real estate company, Regus most of us this year will have what they call a “Workation”.  Among their findings is that during this year's vacation time:

• 50 percent of Americans will do some work
• 75 percent plan to stay connected to the office
• 66 percent will be checking and responding to email  
• 29 percent may have to attend meetings virtually

While it’s possible people are inherently more productive lately, my guess is this behavior is a reflection of economic concerns.  A new CBS News poll  shows only 20% of Americans think the economy is improving, and 39% think it has permanently declined. 

While admitting that I will do some work this weekend, I would also say that particularly around the 4^th of July my belief in the resilience of the American economy is very strong.  As an encouragement to economic development  I’m passing on the IBIS World  suggestions for  5 best growth industries for start up businesses. 

1.  The Testing and Educational Support industry has gown an average of more than 6% a year over the past five years, and that growth is expected to continue.  The rapid pace of change in the work place has yielded dislocation for lots of folks.  Training and testing the relocation of these workers into hot job areas is already a $15 billion dollar industry.

2.  IBIS World acknowledged the obvious opportunities available in cloud computing and mobile, but also brought up the need to provide services to help businesses with their technology needs. As examples of this they suggest looking into IT consulting, logistics, online lead generation, and data mining consulting. 

3.  This next slot was one that surprised me.  The strength of the “Green business” is withstanding the economic downturn. IBIS World projects environmental consulting growth should be upwards of 9% a year through 2016.  Growing just as robustly is the inverse industry – environmental remediation.   

4.  The next one was hard to agree with -- Residential and Commercial Construction.  IBIS World’s hypothesis is essentially, people need a place to live and / or work, so declines in this area have to end at some point.  Still there is so much slack in the system, I have to question the idea that now is the time to get involved in the construction business.

5.  Interestingly their pick for health care growth opportunities is alternative health care.  They project that industry’s revenue to grow 4.3 percent annually for the next five years, reaching $14.4 billion by 2016.

Looking at all this I’m inspired to work on a mobile app that makes it easier to meditate on your tax planning options without using so much paper….