“Recession or Recovery?”

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Dan WeissAs reported in a recent survey, U.S. small business owners can’t agree on whether we’re still in a recession or in an economic recovery. Forty-three percent (43%) say it’s still a recession, while forty-five percent (45%) say we’re in a recovery.

Thirty percent (30%) of U.S. small business owners list their top business challenge as “economic uncertainty.” Other challenges listed include poor sales, taxes, competition, and healthcare costs.

The importance of these survey results is in perceptions rather than the textbook definitions of economic conditions. Why is that important? Because it’s reasonable to assume that small business owners will base their business decisions on their perceptions of economic conditions.

Perceptions of economic conditions are, by their very nature, subjective and a matter of perspective. If your neighbor is unemployed, it feels like a recession. If you’re unemployed, it feels like a depression. If you’ve been gainfully employed, and you found yourself cursing the heavy traffic in a major shopping district anytime during the past several years, you probably thought we were in “boom times” in spite of what the academic eggheads were saying.

I suspect business owners will always have concerns about potential downturns in the economy. And it’s fairly obvious that this concern has been heightened by the difficult recession we’ve experienced in the past several years. But how much of the concern is political polarization that has been promoted by an increasingly subjective media?

It’s difficult to know the answers to these questions and perhaps irrelevant. The interesting question is, are perceptions of economic conditions holding you back?

Are you using all the business tools at your disposal? Do you measure your key performance indicators at least weekly? Do you have credible budgets that you track on a monthly basis to measure your results? Have you forecasted your business trajectory to predict your profitability over the next twelve months?

If a business opportunity presents itself, do you decide whether to proceed based primarily on a “gut feeling”? Or do you have processes for financial and business analysis that will allow you to support your gut with some numbers?

Honest answers to these questions will help to clarify the source of your uncertainty. Is it with things you can control (e.g., your specific responses to your current business results) or things you can’t (e.g., the broader economy)? It’s almost always a combination of the two, but concentrating on things you can control will almost certainly reduce your stress levels and lead to better business results.

When it comes to the future, none of us has a reliable crystal ball. Are you allowing your opportunities to be unduly influenced by media opinions of the economic environment? Or are you proceeding cautiously to take advantage of opportunities, armed with the analytical tools you need to succeed?


Could you use help (1) identifying the right measures of your business progress or (2) setting up a template for business decision making? Contact Counterpart CFO for a free, no obligation consultation, and we’ll identify specific ways we can help you.

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