U.S. Economic Forecast: A Small Business View

As we are creeping into small-business budget season, I’m starting to work with clients to develop forecasts for 2013 and I’m running into a real challenge; the business landscape is dominated by uncertainty.

As I write this post the presidential election is dominating the news. What effect will our choice have on the economy?

Then there is the “fiscal cliff” that Congress has created for us. Will that be resolved? What impact will that have?

The European central bank has a series of crises scheduled for mid–2013. Will that spill over to the U.S. economy?

Add to these issues the implementation of health care reform, and local and regional issues that may impact your business… I don’t remember a time where the future looked so cloudy to me.

But then I remember that I am working with small businesses! We don’t need a raging growth economy in order to succeed. Most of my clients don’t need thousands of clients — they just need a couple of dozen good clients. The most important factor in their company’s success isn’t the national economy; it’s their effort and the health of their specific clients.

So when you read the scary economic forecasts, please don’t lie awake at night over it. Instead, spend your time building a new product, developing some compelling content, reaching out to talk to current and past customers, and encouraging your staff. Keep your head down and get your best work done! Your ability to stay focused on what’s happening with your business — instead of the whole world — will keep your business on track and growing.

Forecasting is an important and necessary exercise for business owners. Are you looking at 2013 with trepidation or enthusiasm? What are you looking at as you forecast your company’s performance next year? 

Comments

  1. We don’t talk about it much, but honestly, I really wish the economy would improve. It’s a headwind for everyone. I remember back in ’08 and you and I both thought the downturn wouldn’t last long. Well…

    I’m not asking for anything big. I don’t want another red-hot fast-inflating economic bubble. Just a bit more growth, better B2B spending / investment, and a better outlook for retiring boomers.

    I don’t think it’s really about the election or even Europe. We just need to finish getting through this era of de-leveraging. I assume it will be another year or two before the fundamentals are stronger. I know we’ll both be ready when the time comes. Right, Brad? 🙂

    • Yes, the de-leveraging is a big deal — but I’m afraid we are far from through it. Individuals and companies have made headway — but governments large and small have a long way to go.

      I’m seeing my clients businesses being quite strong now — but I’m hesitant to trust that momentum going forward. I know they are fundamentally sound, and if they keep working it, it will work for them. But how much growth should we plan on?

  2. We don’t talk about it much, but honestly, I really wish the economy would improve. It’s a headwind for everyone. I remember back in ’08 and you and I both thought the downturn wouldn’t last long. Well…

    I’m not asking for anything big. I don’t want another red-hot fast-inflating economic bubble. Just a bit more growth, better B2B spending / investment, and a better outlook for retiring boomers.

    I don’t think it’s really about the election or even Europe. We just need to finish getting through this era of de-leveraging. I assume it will be another year or two before the fundamentals are stronger. I know we’ll both be ready when the time comes. Right, Brad? 🙂

    • Yes, the de-leveraging is a big deal — but I’m afraid we are far from through it. Individuals and companies have made headway — but governments large and small have a long way to go.

      I’m seeing my clients businesses being quite strong now — but I’m hesitant to trust that momentum going forward. I know they are fundamentally sound, and if they keep working it, it will work for them. But how much growth should we plan on?

  3. Assuming
    that a small business has a proven,solid offering to a viable market, the
    economy is a secondary consideration for forecasting in my opinion. A
    well functioning company should be thinking about what they can do to increase
    leads and sales while gut checking that with the “economics” in their
    specific market. Also, in an uncertain economy, like now, I think that
    it’s important to have a contingency plan for quickly reducing expenses and
    remaining viable in the case of unexpected downturn.

    • Todd,

      You and I are totally in alignment/agreement. If you have solid customers, and a good value prop, the economy is a secondary factor. My question is in this environment what indictors are you looking at? What would make you think about dusting off that contingency plan? When leads slow down? When losing ratio starts to drop? Do you look at the health/attitude of your clients/customers? How are they feeling?

  4. Assuming
    that a small business has a proven,solid offering to a viable market, the
    economy is a secondary consideration for forecasting in my opinion. A
    well functioning company should be thinking about what they can do to increase
    leads and sales while gut checking that with the “economics” in their
    specific market. Also, in an uncertain economy, like now, I think that
    it’s important to have a contingency plan for quickly reducing expenses and
    remaining viable in the case of unexpected downturn.

    • Todd,

      You and I are totally in alignment/agreement. If you have solid customers, and a good value prop, the economy is a secondary factor. My question is in this environment what indictors are you looking at? What would make you think about dusting off that contingency plan? When leads slow down? When losing ratio starts to drop? Do you look at the health/attitude of your clients/customers? How are they feeling?

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