How long has it been since we started reading and hearing stories about a recession? 1 year? 2 Years? Are we in a recession now but don’t know it? Is one really coming?
I’m sure many business owners if not most people working in businesses as leaders, managers and employees are asking themselves these types of questions. I can’t tell you whether we are in a recession, heading for a recession or neither, but I do have some thoughts I’d like to share.
· If people (aka consumers) stop spending money, if companies stop spending money and if companies start firing people and stop hiring people, we will end up in a recession—because those things will certainly cause GDP/GNP (Gross Domestic/National Product) to decrease.
· If those things happen because of fear of a recession (news stories and other talk of recession), then talk of a recession will have been the cause, or at least a contributing factor to a recession.
· Over the past few months, I’ve heard and read stories about large publicly-traded companies laying off thousands of workers. Every time I hear or read them, I ask myself are they laying off people in anticipation of a recession? And if so, are they just increasing the likelihood of a recession? If that’s not the reason, then how did they let themselves grow their staff to the point where they could layoff thousands of employees without a hurting the operation of their business?
If you’re a business owner and/or manager, what should your takeaway from these thoughts be? I have two suggestions.
First, if you decrease your staff or your spending, do it because it’s right for your company and your circumstances.
Second, whether the U.S. economy is doing great, is in a recession or if things are unclear, keep an eye on your spending and staffing. As a financial manager (CFO, Controller) for entrepreneurs for the past 35 years, I’ve always tried to help my employers and more recently clients to be as profitable as possible while also planning for and investing in their growth. Companies, their systems and their employees should become more efficient over time so that less people are needed to support the same amount of revenue and sales. The same people can handle more revenue or so that they don’t need as many additional people to handle fast growth. When I hear and read the stories about companies laying off thousands of people, I just wonder how they got to that point.