• Business owners are more optimistic
• The marketplace is changing
• Cash flow is improving

Optimism
Businesses are much more optimistic than they were at the close of the first quarter. Optimism among businesses has improved from 33 to 45%. Those respondents who feel they will gain market share in 2009 has increased from 15 to 70%. An overwhelming majority (73%) feel their business will emerge from the recession stronger than before; the minority reporting their business will emerge weaker or the same decreased from 34 to 27%.

Realities of a Changing Marketplace
While optimism has grown, reality has also arrived. The marketplace has changed as a result of the economic slowdown. In fact, over half of the respondents report that the competition has decreased. Revenue expectations reflected this new reality as the percentage of business owners anticipating a revenue decrease in 2009 grew from 24% in March to 42% in June. As a result of the changing marketplace 97% of respondents report making changes this year and 63% report they intend to make more changes.

Other signs of reality included a decreased percentage of respondents focusing on core business to maintain or grow, shrinking from 45 to 30%, and the percentage of respondents reporting a lack of capital hurting their business grew from 16 to 30%.

Cash Flow
However, since March, respondents report better cash flow. June’s survey reports 39% saw improvement, versus March’s 3%. The June survey shows cash flow remains unchanged for 48% of respondents versus 40% in March. Only 13% of the June respondents reported worsening cash flow versus 57% in March.

Signs of an Improving Economy
The number of businesses reporting their business is doing very well increased from 7 to 13% and those reporting modest growth increased from 10 to 23%. Meanwhile, those reporting their business is off decreased (from 67% to 55%). Businesses are showing signs of optimism; 65% plan to make capital investments this year if funding is available—an increase from 35% in the March survey.

Click here to review the detailed survey results. Learn how businesses are
managing to stay afloat or even thrive in this difficult economy.

But, the madness continues.

What am I talking about? Insanity, by definition, is to try the same thing over and over again and expect different results. In other words, what worked before this recession, may not be working now.

Two very prominent examples come to mind:

• Newspapers. Ad revenue is off, readership is a fraction of what it once was, and the alternative news sources have grown exponentially. Yet, to survive, the Boston Globe has chosen to extort cost concessions from their unions. All these concessions have done is put off the inevitable demise of the paper. Has the Boston Globe fundamentally changed its offering? Its still arriving at my door step every morning. Its still printed and distributed the old fashion way. Although it is much thinner than in the past. Cost concessions are not going to stop the continued slide in ad revenue and readership, just prolong the inevitable. By skirting the real issues it’s just a matter of time before it disappears.

• The American auto industry. Its taken the brink of death for GM and Chrysler to realize how out of touch they are with American consumers. GM can’t continue to depend on trucks and SUVs when gas is $4 a gallon—customers want greener cars. The escalation of oil prices and a recession has shocked the American public into an attitude of thrift and environmentalism. Even after an embarrassing private plane trip to Washington to plead for cash, they still didn’t get it. GM returned with a plan still heavily dependent on trucks and SUVs to fuel their growth. Promptly rejected by the administration, they had to come back yet again with a plan closer to the government’s demands.

There’s no better time than now to stop the insanity. You probably don’t need to look closely at your business to see what isn’t working. Find out why, and change before its too late.

• Wide-scale change
• A focus on strengthening the fundamental brand
• A priority shift toward improving the core business

Change is nearly universal. Almost all businesses have had to make adjustments since January 1st, and 65% plan to make even further changes this year.  Only 7% of business owners reported that business is doing very well, and only 3% say they have had improved cash flow. The vast majority of businesses say that their business is off as a result of the current economic climate. Clients are fewer, and the demand for products and services has declined.

Top-of-mind. The most important business initiatives planned for 2009 include strengthening brands, improving existing products and services, and improving internal efficiencies. As the need to stand out from the pack becomes even greater, businesses are focusing on what sets them apart from their competition.

An improvement of core business. Many businesses have been able to stabilize or even grow by focusing their efforts on improving the core business. Although there has been an overall decline in demand, the majority of business owners feel they are making the necessary adjustments, and anticipate that they will come out of this recession even stronger than before.

In spite of the trend toward tighter budgets and fewer customers, business owners feel the general outlook has improved since the beginning of the year. A significant percentage have changed their economic perspective from pessimistic to neutral. In fact, over half the business owners surveyed view this economic climate as an opportunity to gain market share, grow, and emerge as a leader.

Click here to review the detailed survey results. Learn how businesses are managing to stay afloat or even thrive in this difficult economy.

Perspectives on Recession

Economic climate survey results

Read the Results