There's an old joke that goes, "A friend of mine told
me to cheer up, because things will get worse. So I cheered up, and
things got worse."
When things get worse--when the economy takes a downturn--will
your business suffer, or will it do better? I say when
rather than if because 1) the economy continuously
experiences up and down cycles, and 2) the price of oil will stay
high.
In 1973, 1974 and 1978, the high price of oil sent shock waves
through the economy. Stagflation destroyed many businesses, big and
small. So when the economy goes down, will you be prepared?
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One of the great things about being an entrepreneur is that you
have control of your company. You're the captain--you can tell
the helmsman which way to turn your ship and what kind of weather
to prepare for. Some questions to ask yourself:
1. With high oil prices, will my business do better or
worse?
2. With high oil prices, will my customers do better or
worse?
3. How many employees will stay with me, even with a 20 percent pay
cut?
4. Can I afford to take a 50 percent pay cut?
5. What can I do so my business will benefit from high oil
prices?
If your answers frighten you, it's time to take action. For
example, if your customers will do worse with high oil prices,
strengthen your relationships with your best customers-and start
looking for new customers who will do well with high oil
prices.
These five questions are important because wealth and energy
have a simple inverse relationship. Generally, when energy prices
are low, wealth increases. As energy prices increase, wealth for
many decreases. If your customers live in suburbia and commute to
work, their wealth will go down as oil prices rise. I'm
concerned that high oil prices will severely contract the U.S.
economy, which is why my two previous columns were about preparing
for tough times ahead.
My company is underwriting two initiatives to prepare for a high
oil price economy. We're building a franchise system to reach
our customers where they live. And we built Rich Dad TV, a
broadcast-quality station that currently operates through our
website, so we can stay in touch with our customers on a more
personal basis.
In other words, instead of our customers coming to us (or us
physically going to them), we're making it easier and less
expensive to stay in touch.
Robert Kiyosaki, author of the Rich Dad series of
books,
is an investor, entrepreneur and educator whose
perspectives have changed the way people think about money and
investing.