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August News and Notes

Is Uncertainty Holding Back Your Business Plans?

As we have written before, the U. S. economy went through an unprecedented period of 25 years of nearly uninterrupted growth from the early 1980s’s until 2007.  During that time, only two brief downturns, neither lengthy nor severe, disrupted the ride for most Americans.  By comparison, the period since then has been a rocky road.  The bursting of the real estate bubble and the ensuing collapse of many of our financial institutions has left a lot of turmoil in their wake.  More recently, the debate over the U. S. debt limit, the downgrade in ratings by Standard & Poor’s, and the subsequent stock market roller coaster ride have created a lot of anxiety.

When things are going well in the economy, people feel comfortable and safe.  This makes risk-taking seem more palatable, since we feel that risks can be controlled in such an environment.  As a result, we look ahead and make plans for the future.  The opposite is true in unpredictable times.  There is a greater emphasis on dealing with day-to-day problems, and less planning for the future.  I find myself getting more calls to deal with problems that must be addressed immediately.  The trouble is, had some of these issues not been put off, they would have never developed into full-blown crises.

As difficult as it may be, now is the time to force yourself to look ahead, especially if you own or operate a business.  It is often more expensive to put out a fire and clean up the damage than it is to take preventative measures beforehand.  Now is a great time to look ahead.  Determine where you want to take your business, and analyze the potential barriers to your success.  Develop a plan that includes an examination of the way you operate your business, with an eye toward making improvements that will serve you for years to come.  Examine current product or service lines, and determine which are most profitable.  Decide if the weaker lines can be improved, or if they should be retired in favor of more promising alternatives.

Some companies need to focus on debt reduction.  Others need to decide if they can implement expansion plans with internal cash flow, or if outside financing or capital will be needed.  If additional financing is required, how can it best be obtained?  What has to happen with your business in order to qualify?  Are unconventional (non-bank) financing options available?

None of these things are going to get done by themselves.  Although it may be difficult to find the time, it is important to address future plans now.  It is also important to not allow uncertainty about the future to distract you from its importance.  A USA Today story published 8/15 announces that there is a 30% chance of another recession.  According to my math, that means that there is a 70% chance for a positive outlook.  In most aspects of life, we’d jump at those odds.

Universal Health Insurance Requirement Hits a Snag

This story from Reuters explains last week's ruling by the 11th Circuit U. S. Appeals Court that the forced insurance provision of the Healthcare Legislation is unconstitutional.

An excerpt from the opinion:  "This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them repurchase that insurance product every month for their entire lives.

http://www.reuters.com/article/2011/08/12/us-usa-healthcare-idUSTRE77B4J320110812

If You Haven't Failed, You Haven't Been Trying

It's sometimes comforting to know that success doesn't come easy to others, even when it may seem that way.  This article highlights the early failures of people who wound up making it big.

From the American Express Open Forum:

http://www.openforum.com/articles/13-business-leaders-who-failed-before-they-succeeded?extlink=em-openf-SBdaily