Monday, June 29, 2009

Will this recession serve as a "great awakening?" Why business may never be the same again

Wow, what happened to those cool mornings of June? Just when we thought it would last, summer and temps well north of 100 have become the norm. Lots going on, so here are some short shots around our community:

THE GREAT AWAKENING... As I make my rounds in the community I'm beginning to hear two familiar refrains from local business owners: first, it's all about cash management right now and second, the enduring lesson from this recession is that businesses may never return to their former size. The cash part is easy: with sales down 30 to 50 percent in some cases, your focus has to be on preserving and managing cash until things get better. To avoid nonpayament, one local business is making customers pay half upfront. Others have simply turned the screws hard down on expenses and are delaying any capital expenses like new computers, cars and equipment. The second part is more worrisome for the long term: businesses that have downsized their staffs have realized that while folks are working harder, things are going just fine. In other words they're thinking: were we too big earlier? And going forward: we're going to stay lean.

As one owner of a prominent business in town told me recently: "think of the money that would have dropped to the bottom line if we hadn't gotten so big."

This tells me that the recovery - at least in terms of employment - may lag far beyond metrics like sales and topline revenue growth. Faced with higher taxes from both the state and federal side and stung from the last recession, there will be a tendency to stay small, and that means fewer jobs in a community that already is job starved. Folks are skittish, and if you can get by without authorizing another hire, you'll do just that.

PETTY THEFT OR SIGNS OF MORE TROUBLE? ... I'm amazing at the sheer number of stories I hear about petty thefts, robberies and overall criminal activity of late. A friend had to call the cops because some weirdo was peering into his window one night, and a few days later his office was broken into. Another friend was in Los Angeles and had her car window smashed and personal items stolen. Recently, my neighborhood has been the victim of a string of thefts. Weird stuff like pool floats, a poolside refrigerator (along with two bottles of champagne) furniture cushions, outdoor lamps even a couple of front door welcome mats. Have things gotten so bad that people are driving through neighborhoods stealing welcome mats? In the grand scheme of things this is all small stuff, but the thought of some nut wandering around your back yard, or crawling over your gate hauling away your personal stuff while you're inside asleep is maddening, not to mention a bit frightening.

No comments: