When The Going Gets Tough

The continuing US housing decline, with weak prices and stumbling sales, has slowed the US and world economies overall. Fourth quarter 2007 US Gross Domestic Product (GDP) increased at an anemic 0.6% annual rate. Some economists think that US GDP will be negative Q1 & Q2 2008, and thus officially define a recession.

Those in the housing sector already feel the pain. We think there are reasons for optimism, but the next six months are going to be tough, especially for those in the building trades. Consider:

• Applications for new building permits are down 3% to 1.048 million units, a level last seen in November 1991.
• New housing starts were up 0.8% in January, but this comes after a 14.8% decline in December 2007.
• The $168 billion economic stimulus package recently passed by the US Congress will provide tax rebates to millions of Americans, and hopefully a large influx of cash to the economy.
• The current series of interest rate cuts by the US Federal Reserve will exhibit their maximum effect in late 2008.

According to Ram Charan, in his excellent 18 February 08 article in Fortune magazine, the current economic downturn is largely due to the convergence of 3 forces;

• A Federal Reserve-induced housing bubble, created by providing cheap money for too long
• Widespread use of collateralized debt obligations (CDOs) to aggregate low-quality mortgage debt
• Failure of investment banks to appropriately downgrade ratings of those 'high-quality' CDOs

The Tough Get E-Myth'd

We at E-Myth believe that smart business owners should use slack times to make their companies better. Here's how;

Innovate, Quantify & Orchestrate: Repeat

Work on innovation, product development and building your brand. These efforts are not top-line, discretionary cost centers, but are integral structures supporting your business. Working consistently in these fundamental areas, like doing regular exercise, can improve the strength of your business.

Innovation, Quantification and Orchestration, as taught in E-Myth programs, are cyclic processes of successful businesses. Commit to this disciplined routine of inspection, measurement and iterative improvement to keep your business solidly on track.

Reward Excellence

Tough times may not seem like the best times to give bonuses, but if one of your departments is truly excelling, you can build great staff loyalty by acknowledging successful efforts monetarily. Also, listen openly to your employees and communicate honestly about business conditions. Simple courtesies like these can have long-lasting positive effects.

Listen to your customers

Ignore your customers' opinions at your peril. Seek out your best customers' opinions, and then act on the knowledge. Difficult times are changing times, and you need to be able to adapt to new conditions.

Improve Your Business Skills

An economic downturn may be financially uncomfortable, but a slow time is also an excellent time to deepen your business acumen, broaden your management capability and strengthen your self-discipline. E-Myth specializes in training and coaching business owners to deal with tough problems; from human resources issues to client fulfillment, an E-Myth business coach is a powerful ally when confronting difficult business conditions.

E-Myth has coaching programs at all levels; single course, single-session overviews, comprehensive web-based courses coupled with online group sessions, and in-depth, one-to-one business coaching programs tailored to fit your specific areas of need.

For 30 years, E-Myth's core competency has been helping business owners to realize their visions for business.
We know that you can do it too.