What an interesting week! Twitter falling apart, tech companies laying off, inflation stabilizing but high, stock market going up, mid-term elections going calmly – so much happening. Add to that the continuing Russian defeats, meeting of global leaders over climate change and Xi and Biden about to meet in Indonesia, Hard to know the best way of managing amidst the uncertainty.
If we pick it apart, tech companies who borrowed heavily are cutting back as are builders who relied on debt and house buyers who can’t afford the higher rates. The choices of world leaders to invade (Russia) or not to invade (China we hope), are affecting not just supply chains, but future investments – like more near shoring and re-shoring. The Infrastructure Investment Act gives incentives for building more manufacturing in the US. Good news. Bids are going out for infrastructure and capital expenses.
So, depending on the industry you are in, these various macro trends will affect your choices in investment, and strategies for growth over the next few years. Overall, I am seeing a lot more conservative approach by most organizations. That is what the fed intended when it kept raising rates. It is now percolating down throughout the economy. Most small to midsize businesses have shored up their balance sheets. PPP loans and forgiveness, plus the ERTC were a big part of this.
If you focus on your competitive advantages and take small but focused steps forward, most established businesses should do well. For start ups, getting investments will be more difficult but not impossible.
As one of my Vistage Members said, getting sales during the pandemic was taking orders and hoping they have the materials to fulfill. Now they actually have to go out and sell. This is what we can control. If it feels like focusing on the fundamentals, it is. We can’t control the macro trends as anxious as they may make us, but we can take the right steps each day to execute our strategic plans. Let’s focus on what we CAN control.
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Image of bridge over San Joaquin River near Devils Post Pile, Ca.