When asked what I think about business conditions in 2010.
I do believe a recovery is in process but perhaps going forward it can be termed the new normal. We will not be returning to the economy of yesteryears. As a strategist for LA Businesses for over a decade, I see firsthand some substantial changes.
(1) The companies will not be adding new workers as they had in the past but rather extend the hours of those employees that have been placed on furlough and then continue to gain productivity from the existing workforce.
(2) Capital investments will be on a "need now" basis rather than invest for future output. This includes software updates, new machinery etc. In the past we would purchase to prepare for growth tomorrow--now we purchase what was actually needed yesterday.
(3) Lastly margins will remain squeezed as competitors engage in heavy discounting to keep the lights on. This translates into less cash flow for future investments; hence the cycle continues.
On the positive side I do see growth; albeit slight and constraint.
(1) The companies will not be adding new workers as they had in the past but rather extend the hours of those employees that have been placed on furlough and then continue to gain productivity from the existing workforce.
(2) Capital investments will be on a "need now" basis rather than invest for future output. This includes software updates, new machinery etc. In the past we would purchase to prepare for growth tomorrow--now we purchase what was actually needed yesterday.
(3) Lastly margins will remain squeezed as competitors engage in heavy discounting to keep the lights on. This translates into less cash flow for future investments; hence the cycle continues.
On the positive side I do see growth; albeit slight and constraint.
Posted by LW and Associates at 12/13/2010 1:37 PM 
Categories: From the desk of Lori Williams
Tags: recession 2010 small business economic conditions
Categories: From the desk of Lori Williams
Tags: recession 2010 small business economic conditions
It's great that even in these hard economic times, you are still planning for business growth. I think we were all spoiled from the economy in the 90's, so the "need now" strategy for capital investments is much more realistic, even in normal economic conditions. Best of luck in these hard times!
-Brendan T.
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