Another Lost Generation?
I had the opportunity to present "Beating the Boomer Bust" twice this week, one of which was recorded for a Texas Public Radio show this weekend. For those who aren't familiar with the piece, it discusses the massive changes that are unfolding as Boomers retire from their businesses. As usual, members of the audience said afterwards "I knew all those things, but I never thought through the implications before." A quick recap before I get into today's topic. "Beating the Boomer Bust" is a look...more
Fighting on Level Ground
Poland has been conquered numerous times in history. Since the 11th century, it has been partially occupied, partitioned, or fully subjugated by the Germans, Russians, Austrians, Mongols, Tartar Muslims, French (under Napoleon), Prussians and Hungarians. The Poles aren't a timid people, and they have given good account of themselves in numerous battles. Their role as repeated door mat is largely due to a single factor. Bad luck. First, Poland straddles a historical divide between western Europe...more
Being Brave in a Brave New World
In the first three posts in this series I've outlined a number of reasons why the American economy is unlikely to grow in the next few years. All of my reasons are factual. The numbers don't lie, and these numbers can't be fixed by looser monetary policy, or stimulus bills, or consumer confidence. They will only be cured with time. One client accused me of trying to "scare" him out of expanding. Nothing could be further from the truth. There is an old trader's axiom: "When there is blood in the...more
Changes in the new landscape
Last week we talked about an economy where we can expect things to stay flat, or at least feel like they are flat, for a long time. The ageing Boomers, a long recovery in real estate and construction, shrinking government spending, weakness in the financial markets and increasing global competition will prevent anything like former fast recoveries for the forseeable future. What does that mean for the business climate? It's one thing to say that things will be flat, but another to translate "flat...more
"When everything is flat, you can see a long way."
That statement was made by Van Palmer of Palmer Technology Systems after a lengthy discussion about economic trends. It perfectly describes why we should be positioning our businesses differently from how we did it at the end of previous recessions. Since World War II, the United States has enjoyed a growing number of working adults as a percentage of the population. This was an effect of both the baby boom, which added 58% to the US population in only 20 years, and the baby bust, the trough in...more
Dealing with "Malaise"
This starts out sounding like doom and gloom. It isn't. I have come to the realization that the world of small business ownership is changing, and we have to change with it. For the next few weeks this column will discuss how we have to be different. Please read through the depressing part- it gets better. I promise. On July 15, 1979 President Jimmy Carter delivered a nationally televised speech on the "crisis of confidence" facing the American people. It has become widely known as his "malaise...more
Raises and bonuses- sharing a recovery
Your business is starting to recover. You are again profitable. If you were smart and agile, you remained profitable or perhaps even increased margins during the downturn by being "lean and mean." One advantage of a financial recession is that employment trails the recovery. So while businesses rebuild their earnings, jobs remain scarce. Most small business owner don't see their employees as part of a statistical anomaly, though. If you froze increases in 2009, they haven't had raises in what seems...more
Black Swans and Small Business Plans
The term "Black Swan" has become immensely popular on Wall Street and in the media to designate a rare occurrence. Google "Black Swan Japan earthquake" (which is popular enough that Google will fill in the last 11 or 12 letters for you) and you'll find hundreds of articles comparing that seismic event and the rare bird. The term "Black Swan" comes from Nassim N. Taleb's bestseller of the same name. Like most ideas popularized in the media, they got it wrong. Taleb's point is that Black Swan events...more
Recessions, Recoveries Bring Out the Sharks
This article appeared in the San Antonio Business Journal on Friday, March 4thA number of our business owner clients have been calling lately to ask about an offer that seems too good to be true.The owner gets a call saying that a top business consultant will be in the area a few weeks from now. Although this consultant typically charges several thousand dollars a day, he has noticed an opening in his schedule. Rather than be idle, he is willing to take the time to do a complete assessment of your...more
Does the Economy Affect Your Business?
I love this quote from Paul Krugman in a breakfast speech a few weeks ago."The Financial Industry rolled along extending credit to everyone, until they had their Wiley Coyote moment. You know how that works. Wiley Coyote runs off a cliff, but according to the cartoon laws of physics, he doesn't fall until he looks down."That is a pretty good description of how the world financial system failed. In fact, the US economy was already in its third quarter of recession, and pundits, including the Long...more
Why is San Antonio Bucking the Trend?
The national economy is recovering, but it has a long way to go. Residential and commercial foreclosures, consumer debt levels, and bloated public pensions will take some time to correct. Yet San Antonio has been named as one of the least affected cities in America, as well as one of the best positioned in the world to prosper in a recovery.How does this "tale of two economies" (see my previous blog) come about? How does a city with limited resources, long a national backwater, charge...more
Entering 2011: a tale of two economies
In January of 2009 I blogged here titled “The Strategic Triple Threat” At that time, Congress had just passed the TARP act, saving the world from financial meltdown. The Federal Reserve was predicting a short recession followed by a resumption of historical growth rates by the end of 2009.I quoted Peter Drucker then, and do so again now, “I don’t predict the future. I merely look at what has happened already and calculate the inevitable results.” In 2009, I looked at the sub-...more
In the long run
I met with a business owner the other day who has experienced a particularly difficult year. A confluence of economics, technology and criminal activity in his industry has kept him working long hours, with relatively little to show for it. He is fried. Burned-out. Constantly wearied by the "fight or flight" adrenalin reaction of tensing up every time the phone rings (because it is so often more bad news.) The company isn't failing financially, but it is failing culturally. People are abandoning...more
Why Don't We "Buy American?"
America's trade deficit underlies a host of headlines. We continue to send payment for fossil fuels to countries that use it to finance people who kill our soldiers. We borrow trillions from China, so that we can pay them for more consumer goods.We export our manufacturing jobs, despite our hand-wringing over the disappearance of the American middle-class, because we continue to buy the cheapest least expensive option, regardless of who made it. Do people in North Carolina buy...more
The Only Thing We Have to Fear?
"The only thing we have to fear is fear itself." FDR famously broadcast during the Great Depression. His speech didn't end that economic slump, and the election next week won't end this one. It will, however, help.The Republicans are currently projected to win 10-15 more seats than they need for a majority in the House, and fall 2-3 short of that in the Senate. Given their recalcitrance in passing legislation this term, and the general lack of statesmanship in our national legislature, I don't expect...more
There are lies, damn lies,
and statistics,I just ran across this U.S. Postal Service press release from 1996."In 1940, a one pound loaf of bread cost 8 cents, and in 1995 it cost 79 cents. A half gallon of milk went from 25 cents to $1.43 in the same period. A first class postage stamp went from 3 cents to 32 cents. Bottom line, first class postage stamps remain well below the rate of inflation."Well, not really. Those numbers yield an annual average increase of 3.22% for milk (177% overall.) It's 4.25% for bread (233% overall...more
The Black Donut Hole
Recently, there has been renewed attention to the work of Corrado Gini. An Italian Facist, he published in 1012 the Gini coefficient, a measurement of income equality among a nation's citizens. As happens in the media, one publication picked up on this measurement of a shrinking middle class in America, and others are happily piling on the bandwagon.One problem. They've got it wrong, or at least they only have it partly right. The standard media story angle is that this recession has decimated the...more
The Long Road Ahead
I'm sitting in Denver International Airport after yet another conference. Fortunately, it's a whole 9 days until I have to come back here for another one.In January of 2009 I wrote a blog on the strategic Triple Threat. The first threat was a severe recession. Second was a slow and painful recovery. Third was a changed economy where spending and consumption would settle at new, lower levels.I attended a presentation by an economist from the Federal Reserve yesterday. His news was...more
Ready...Set...Wait? Leading Indicators and small business
In the last few weeks I've talked to a score of small business owners who say that things are improving for their companies. Several have been involved in trade shows that had record attendance. A few manufacturers are seeing a strong uptick in orders. Retailers are experiencing increased traffic.We all know that the businesses who are positioned to move early in a growing market get the jump on those who aren't, but how do you know whether this is the time to move? Most entrepreneurs behave like...more
Is America the next Rome?
James Fallows has written a massive, thought-provoking article about America's current social, political and economic issues in The Atlantic. Like so many of us that have spent time overseas, he looked at the US with fresh eyes on his return.In Fallows' case, he moved his family to China for three years so he could have a deeper journalistic perspective about that country's role in the 21st century, and moved back a couple of months ago.He comes to mixed conclusions about our issues...more
