Business Cycles and Recessions

Business cycles and recessions go together just like business cycles and profitable times.

Whether you're starting a business, expanding a business or managing a business, here are some ways to make sense of the current business cycle and recession.

#1 You control your cash flow
Whether you like federal economic policies or dislike them, there's not much you can do to impact the day to day decisions made in Washington, D.C. Yes, you can vote, write letters to your congressional representative and write opinion pieces but don't think your success or failure is completely dependent on forces beyond your control.

Think about what you can do to increase your customer base, cut expenses, manage your cash flow effectively.

#2 Sweat the Small Stuff
The reality of recession is the businesses in the middle hurt worst. That statement is according to Dan Kennedy in his December 2008 newsletter. However, he writes that all businesses are impacted by the need to retain customers. The big chains may lose customers because of the small stuff such as the counters at Starbucks cluttered because of the clutter from impule purchase items. Small stuff matters a lot.

A company that sweats the small stufff and is managing their business cycle well in the recession is Chik Fil-Et even though they're closed on Sundays.
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#3 Educate yourself
Learn some key economic terms and a bit about history. Here's an excerpt from an online article about recessions and business cycles by Christina Romer.

Burns and Mitchell defined a recession as a period when a broad range of economic indicators falls for a sustained period, roughly at least half a year . . . .

expansions and recessions occur at irregular intervals and last for varying lengths of time. For example, there were three recessions between 1973 and 1982, but, then the 1982 trough was followed by eight years of uninterrupted expansion.

The 1980 recession lasted just six months, while the 1981 recession lasted sixteen months. For describing the swings in economic activity, therefore, many modern economists prefer the term “short-run economic fluctuations” to “business cycle.”

Finally, to navigate the current recession, make sure your skills are sharp, fix the snags in your business operation, and concentrate on offering value to customers and those who work with you. That's the best way to move through this business cycle and the current recession.

Ignoring Business Opportunities

You set out to start a business and problems attack your business.

Other business opportunities look good - even better. Now you start working on a separate project and drop the first one.

If you want to start a business and then build a lasting business legacy, then I suggest you put on blinders and start ignoring business opportunities that aren't your central focus.

The thought came to me after reading a blog post from a 22-year-old man, Dontrell Lyons, who outlined the differences between an entrepreneur who builds a business for the long-term and an opportunity seeker who's swayed by every money making deal that sounds hot.

I recommend reading through the list Dontrell compiled.

In the meantime, do you have a long-term value-added outlook for your business whether it's your own or someone else's and you're hired to work?

Building long-term value is a satisfying pursuit and can take you through the discouraging times when cash flow is tight.

Spend Money to Build Value in Business

Building Value in a Business

Money spent strategically builds a brand name over a long period of time. Not spending money wisely can hurt a business in the long run and damage a reputation.

Here’s an illustration thanks to Robert Barbera, owner of Barbera Property Management in Monrovia, California with rental units in 26 apartment buildings and single family homes in the San Gabriel Valley.

Quality landscaping is important to each of Mr. Barbera’s rental units in eight cities including: Monrovia, Arcadia, and Pasadena. He talks about this and his views of tenants in a video posted on YouTube.

But why spend money on landscaping? After all, when a landlord adds up the cost of insurance, taxes, and maintenance why bother paying too much attention to trees and flowers? Shouldn’t a nicely mowed lawn be all the presentation that’s needed?

Robert Barbera believes landscaping is a strategic expense that pays in the long term.

How? It gives potential renters an attractive first impression of the apartment they’re visiting.

“Landscaping is the start of everything,” said Robert. “When people drive down a street and see a sign the first thing they see is the landscaping. That is the first test of a building. The ornamentation of the bushes and the colors that come from the flowers--it has to be right.”

Robert Barbera believes quality landscaping shows pride of ownership. He maintains a professional crew to maintain street appeal and to keep the interiors of the apartments in working order.

He believes the money spent on maintenance and upgrades keeps tenants satisfied and maintains long-term relationships.

There is value built for both parties – as an owner his vacancy rate is far less than the national average. Meanwhile, the tenants are satisfied since they feel the property owner is listening to them and considerate of their needs.

To see available units for rent in the San Gabriel Valley, log on to www.barberaproperties.com.

Why Ameicans want to Run a Business

The drive for Americans to run their own business runs deeply across the United States.

1 in 3 Americans wants to run their own business, according to a survey recently conducted by Success magazine.

No wonder: recently, Starbucks announced the closing of several hundred stores and in my hometown of Pasadena, IndyMac bank is purging its workforce, too.

A person who has the will and drive to successfully run their own business may seem in control of their career goals, business dreams and personal finances.

The Life Goals survey from Success magazine also revealed 31% of the 1,200 people who responded said they want to retire early. Raising a family was the top goal of 16% of those surveyed.

Success magazine has listed 27 resources for success that covers everything from having a personal life coach to building a personal library.

The list of resources for success includes:

#1 Having a list of goals

#2 Eating properly
I know I don’t function as well when I’ve binged on ice cream right before bed.

#3 Friends
Having a support network is key to moving through the challenges of each day. Personally, there are 3 people I meet with on a regular basis.

There are other items on the list which surprised me:

# 8 Having a great pillow and bed!

# 17 External or online drive

# 18 Good dress shoes

#23 Breath mints!
Now isn’t this getting a bit picky? However, I often run to the store for my favorite gum after lunch or a snack.


I believe one of the key ingredients to success is certainly having a goal and then understanding the key objectives and steps needed to reach that goal.

But the ability to “stick it out” or “staying power” is key to surviving the first 2 years in business.

Having a plan will help ensure the possibilities of success especially when planning for issues like cash flow or investigating franchise opportunities versus owning your own brick and mortar or online store.

Despite all the technological advances, good solid input from trusted advisors should always rank high on any survey.

Business Innovation

This is a link to a post I wrote last August on business innovation when the url of this blog was still http://www.donbizblogger.blogspot.com/.

Business Innovation - What is it?

Now as I think of business innovation, I also think of one of the most basic ingredients that no business can afford to miss or skip.

Simply put -- be excellent at what you do. Even be great at what you do!

Be enthusiastic about what you do and treat your customers or clients with respect and care.

Maybe finding ways to be your best and excellent is itself a way to innovate. Or else it's a way to position yourself in the marketplace.

Ask yourself these questions:

1 What went well during the past quarter in our business? And what went well in June?

2 Now, what do we want to achieve in the next business quarter and what steps do we need to take in July to make that happen?

3 What do we do extremely well - or what are we capable of achieving and is that in line with the stated purpose of our company?

4 Do we have unsatisfied customers or clients and what can we do to keep them wanting to come back to us for more?

Stick to the basics. Do them well and then discover the little things you can do better. When pursuing what's tried and true then you might discover an innovative way of doing business.

Can you earn a living off Craig's list?

I came across this blog entry about earning a living off Craigslist. It's possible to generate business leads and maintain your professional stature if you word the ads properly.

I recommend you taking a look at this post:

Earning a Living off Craigslist

My nephew was earning up to $1,000 monthly on Craigslist. He would go to yard sales, find items he knew would sell, buy them for a few dollars and turn around and sell them for up to $60 or $70. One time, he bought a pair of speakers for $2 and sold them for $90.

I call that a good mark-up.

The concern for professionals is that Craigslist may not look "professional." But the advantage is there are multitudes of people visting the site.

Perhaps you have a free report to give away or a free meet and greet event. Then posting on Craigslist shouldn't be in any way a mark against you.

I'd like to hear from anyone who has advertised their business services on Craigslist and found it helpful.