Whether or not the predictions we’re hearing are accurate, the economy is in for some kind of a change. If you read everything you get your hands on, you might believe that we’re in for a recession soon.
My peers in the journalism community are poising their pens to write about what they deem inevitable. A turn in the economy is great fodder for business journalism.
Most of the business owners I talk to don’t seem as concerned. They’re not hoarding their cash. They’re not laying off employees. In fact, the growth-oriented businesses SBN Magazine has been covering the last several months are talking about the investments they plan to make — or are now making — to prepare for long-term growth.
Why is this? For one, when the U.S. economy is facing a predicted recession, money gets cheaper. That means many businesses take the opportunity to invest in new technology and equipment at lower rates. But even at those costs, if a company is not poised for growth, why would it invest in that direction?
The answer is, at least from the company owners I have spoken to the last couple of months, that they indeed are poised for growth — even (and especially) if their competitors aren’t.
Whether or not you believe that President Bush’s tax-relief package or Federal Reserve Chairman Alan Greenspan’s rate cuts will spur the economy, economists will tell you that monetary policy actions take at least 18 months to yield results. While these actions can have immediate effects in terms of convincing businesses and consumers that better times are around the corner, they can’t affect the current economy.
Savvy business owners know that this forecast is not a bad omen. They see it as an opportunity to jump ahead. They know that they must build upon the policies put in place today to reap the benefits when the economic landscape evens out a year or year and a half from now. There will be some fallout, as we’ve witnessed in the dot-com industry of late, but these savvy business owners say, better our competitors than us.
Now is not the time to sit still. Better times are ahead, but we won’t all be here to enjoy them. On a large scale, you can learn from companies such as Apple, which is preparing to boost its position in the marketplace by adding extras, such as standard CDs, DVDs and increased power levels, to its computer products.
On a local level, you can learn from our cover story this month about a company increasing its capacity so that it can expand its product line.
These companies are staying within their areas of expertise, but expanding their capacities. Their strategies share a common philosophy. They are positioning themselves for growth by sticking to what they know best.
It may not be the time to take on a big risk, but as they’ll tell you, it’s certainly not the time to be stagnant. Connie Swenson ([email protected]) is editor of SBN Magazine.