On the Road: Two Ways to Extend the Rising Trend in Your Business

  • by itradmin - Wed, 03/21/2018 - 15:40
Phase B Business Cycle

The business cycle peak is coming. Our economic forecasts have been calling for it since early last year, and our latest analysis points to mounting evidence from economic indicators that it will happen by mid-2018 as we expected. If your business correlates to the overall economy, this means that you will likely see a slowdown in your growth rates in the second half of this year. Many business leaders have been asking us if there is anything they can do to extend the rising trends that their companies are enjoying now or if they are fated to follow the economy and their markets into Phase C, Slowing Growth. There are two courses of action we suggest that may support your current Phase B, Accelerating Growth, trend beyond what the economy can and will sustain.

First, hire more people. But not just any people. Sales people, and talented and proven ones at that. It is likely too late in the business cycle to add operational staff. That is, of course, unless you are in a countercyclical market. However, for businesses that correlate to the economy, bringing talented, experienced sales representatives on board right now may allow them to obtain new clients or enter new markets. This could extend their current rising trend beyond its imminent cyclical peak. Of course, it would be greatly beneficial if these sales agents bring with them established client relationships that they can leverage to win new business for the company. An added benefit of sales staff is the fact that their variable compensation is based on performance. This limits your exposure to the fixed costs associated with high base salaries.

The second course of action is to launch new products or services. Doing so will hopefully also enable you to penetrate new market segments and extend the rising trend in your business. After all, new ventures can help your company buck the softness on the back side of the business cycle. Assess market needs to identify existing gaps in your product portfolio and uncover complementary opportunities. This is also a great time to think about diversifying your product offering if you find your business overtly reliant on a particular vertical market or specific customer.

Consider employing these strategies as a means of extending the cyclical rise in your business into the second half of this year and possibly beyond. However, as these activities can take some time to implement, act as quickly as possible if you decide to pursue this course of action. Otherwise, reach out to ITR Economics, or talk to one of our economic speakers on the road, to explore ways to implement a Phase C, Slowing Growth, approach to minimize the downside pressure on your business as the economy and your markets slow in the second half of the year.

Alex Chausovsky
Senior Consulting Advisor