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Profit Power: Will the economy keep booming?

April 18, 2018 -  By

The economy is booming. And yet the economic forecasters I follow say that we may enter a small recession in late 2018 or in 2019. The great companies I work with are not worried about an economic dip because they are well prepared.

Here are 10 reasons why great companies are not worried about the next recession.

1. As the leaders, they don’t put their heads down in the trenches. They are not lost in their work. They keep their heads up and keep networking with an ear on the street.

Love your balance sheet

2. They show real love for a strong balance sheet with strong retained earnings, i.e. they hold onto to some profits and cash. They have a cushion to weather bad weather (like too much snow or drought) and other economic turbulence.

3. They rent, lease and buy equipment. They have the ability to scale their business without being over extended.

Become a marketing and sales genius

4. They have a strong, effective marketing program to keep leads flowing in. They have created momentum, and they are prepared to raise their investments in marketing, not decrease it. (Imagine their benefit when competitors cut back, and they increase their spending. They will truly stand out.)

5. They have a strong sales culture. If you are simply “order taking” due to strong referrals, what do you do when the orders dry up? My best clients will grow through the next recession. How about you?

Don’t accept lazy profit

6. They are focused on daily efficiency and measuring profits by division. You don’t want to get caught being lazy or unfocused with a weak division.

7. They remain very nimble in how they staff up and staff down, especially in the shoulder seasons. Always keep an eye on labor costs relative to revenue.

8. They are focused on implementation and on how they add overhead. They know that focus and speed of implementation will help them thrive in any economy. You don’t want to be caught with too many growth initiatives, do you?

No failing grades or failing people

9. They retain their A players and reposition their Bs to grow into As. They are also constantly pruning the tree, dealing with any dead weight.

10. They keep recruiting, looking to add more A players. As Jack Welch taught me, a team of A players will make you money in both up and down economies.

Jeffrey’s Breakthrough Idea: The economy will always go up and down. You can prosper in any economy if you take care of these 10 fundamentals.

Photo: iStock/xijian

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Jeffrey Scott

About the Author:

Jeffrey Scott, MBA, author, specializes in growth and profit maximization in the Green Industry. His expertise is rooted in his personal success, growing his own company into a $10 million enterprise. Now, he facilitates the Leader’s Edge peer group for landscape business owners—members achieve a 27 percent profit increase in their first year. To learn more visit www.GetTheLeadersEdge.com.

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