Alan Greenspan said we would enter an Age of Turbulence between 2010 and 2011, when baby boomers begin retiring and straining government financial systems. I believe the Age of Turbulence is already here. On the same day Greenspan gave that prediction, a Phoenix entrepreneur announced his new business: an auction website for nurses, where they offer their professional services to the highest bidders--namely, hospitals. He was swamped with calls from nurses.
Combine baby boomers' increased needs for medical care, a shortage of nurses and an entrepreneur, and you get turbulence. While this is good for the entrepreneur and the nurses, I feel for hospital administrators trying to keep costs down while working to keep nurses and patients happy.
Even if the government denies it, we all know inflation is occuring. We know retiring baby boomers will cause a shortage of employees throughout the system. We also know there's a baby bust generation following the baby boomers. This means even more fuel for the Age of Turbulence: fewer workers, inflation, technology and higher wages. For the entrepreneur, this means planning--and making changes--now.
As entrepreneurs, we need to figure out how to increase profits and decrease expenses to pay higher wages. This requires creative thinking and the courage to make changes before the storm hits. So . . .
1. Downsize early. About three years ago, while the economy was good, I began encouraging certain employees to move on while they could still find new jobs at higher pay. They weren't bad workers; most just didn't fit the culture of my business, had grown stale or had lost their creative spark.
2. Hire less and pay more. Rather than rushing to fill the vacancy, I watched to see which employees would voluntarily pick up the slack. Once I knew who my real leaders were, my team began hiring. Today, we have fewer workers who do more work and receive more pay.
3. Step up advertising. With the savings in wages, we went to TV, web, radio and print media and negotiated long-term advertising and promotion contracts. It's amazing how much of a discount and better treatment you receive when you're willing to commit to a long-term relationship.
4. Increase distribution. For the past two years, we've been developing a franchise delivery system. Just as nurses want to become free agents/entrepreneurs, others do, too, and we realized we needed to tap into that entrepreneurial spirit.
Our preparation for the Age of Turbulence began nearly a year ago. What are you doing?
This story appears in the January 2008 issue of Entrepreneur. Subscribe »
