It is normative for Opportunity Inc. to publish its’ annual economic forecast at this time of year. As we reviewed data and considerations, we have opted for what many will view as a more cowardly approach. That is: sharing 5 topics that entrepreneurs should pay special attention to in their 2011 planning.
A review of the performance of our client base has us cautiously bullish for the coming year. Recent performance of our client’s and many economic indicators suggest obvious easing of recessionary pressures. Lifts in consumer confidence, the surge in the purchasing manager’s index as well as other broad indicators promote optimism. However, “we believe we are now in place where no one has been before.” The looming effects of pending legislative decisions, world debt, world skittishness due to terrorism, the probable continued soft housing market, and overall worldwide economic/political uneasiness promotes “mindful caution.” Note – worldwide considerations are emphasized twice in the prior sentence. We truly are in a worldwide economy in this decade.
We pride ourselves in practical and pragmatic input to small businesses. There are limitless web blogs from “Consultants and Economists” telling entrepreneurs to be cautious and presenting a forecast stocked with hedges with no resolve. Our conclusion was to suggest you keep 5 subjects top of mind in you’re planning as the year turns.
IMBEDDED COMPENSATION COST – We have seen small business appropriately skinny down over the past years. Fat and waste has been purged. In recent quarters we have seen entrepreneurs work to hold and reward key/core staff that has remained. Many are restructuring to set the stage for 2011. Take care to build leveraged incentive based programs for your key people. Base salary increases evolve to be imbedded costs and could create pressure in the probable waves of the recovery. Be creative and work to tie more compensation programs to financial results.
SHIPPING EXPENSE – We are seeing signs of a notable impactful cost increase on the horizon. It is impractical to believe that the recent continuing creep up of fuel costs will not hit this expense line in your business. Build your plan with cushion here and revaluate each policy and procedure for customer charge backs. Be ready when the letter comes announcing base rate hikes PLUS fuel surcharges.
E LEVERAGE – Internet sales and internet marketing are surging. Over the past 2 years marketing budgets have been slashed. When you rebuild, think differently. What percent of your prospects and what percent of your sales are generated from your web site. If your web presence remains a static brochure you may be approaching dinosaur status.
SHARE GAIN OPPORTUNITIES – The competitive landscape in most industries changed dramatically in the past 2 years. Resources and customers from prior competitors are now available. Downsized companies owned by tired yuppies are ripe for acquisition. Take time in the coming month to do a complete competitive assessment and develop programs to capture share at this unique time. This may be a chance to take advantage of uncertainty.
HEALTHCARE – THE WILDCARD – Speculation on the future of healthcare is now a national pastime. Two things are for sure; it will change – and related expenses will affect your bottom line, and it will evolve to be increasingly important talent retention/recruiting lever. Consider seeking professional services to support your quest for benefit packaging. “Yes – professional services are expensive, but unprofessional services can be REALLY EXPENSIVE!”