Any idiot can make money in a boom economy. It takes savvy,
quick thinking and a bit of luck to prosper in a down market.
Business had been harrowing before terrorists struck the World
Trade Center and the Pentagon in September. It has become even more
difficult in the months since. We may not fully understand the
economic impact of these attacks for years to come.
Still, business goes on. Shopkeepers are selling sandwiches to
bond traders on Wall Street. Designers are creating Web sites for
small businesses. And contractors are helping homeowners build
additions.
Content Continues Below
As you move forward into 2002, draw on the vital lessons of
2001. What follows are case studies of the year's important
business trends and events. They offer a mini-education on
everything from missed clues and miscues to burgeoning
opportunities. By avoiding others' mistakes and tapping the
keys to success, you will survive the tough times and prosper in
the years ahead.
Mind the
Consumer
As we headed into 2001, there was a big warning sign flashing for
anyone who cared to look. Consumer confidence, as measured by The
Conference Board, had begun a steady downturn from its peak in
September 2000.
"There's a big debate whether [consumer confidence] is
a leading indicator or a lagging indicator," says Todd
McCracken, president of National Small Business United, a
small-business advocacy group. "But the small-business owner
should pay attention and prepare themselves if a slowdown is on the
way."
| A YEAR
LATER: | WHOOPS! |
"For 2001, consumer spending will be excellent. Right
now there is really no weakness in the
country."
-Delos
Smith, The Conference Board, Entrepreneur, December
2000 |
Unfortunately, many business owners don't take the time.
"Most entrepreneurs don't even pay attention to [economic
indicators]," says David Minor, the William M. Dickey
Entrepreneur-in-Residence at Texas Christian University (TCU) in
Fort Worth. Entrepreneurs are usually too busy building their
businesses and need to make a mental mind shift-and perhaps some
tweaking of their business operations.
When the consumer begins getting conservative, says McCracken,
start eyeing your investment plans carefully. One way to do that
without derailing them completely is to lease rather than purchase
equipment, suggests Minor.
The same solution works for your staff. Minor advises
outsourcing operations or hiring temporary workers instead of
hiring new employees. At the same time, he says, rely on your
employees to find solutions that keep growth rolling. You need to
share your concerns that swooning consumer confidence portends bad
days ahead for your business.
"If [employees] are involved in how the problems are
addressed, then you get buy-in from these folks," he says.
"They're more willing to do what it takes to fight through
these tough times." Your workers may exchange pay raises for
bonuses tied to business goals, but they won't do it willingly
unless you bring them into your business decisions.
 Take a look at the hot
trends and businesses for 2002 in our special Hot section. |
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