One of the most critical values that ITR Economics provides is removing the emotion from your business planning. Every business leader faces ever-daunting questions, such as “is this the right decision?” or “is this the right time?” or “how can I be sure?”
To help with the psychological aspects of managing a business, ITR has created a roadmap based on the Business Cycle. They’ve divided the Business Cycle into four phases and have designated specific business practices for each phase.
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Here’s a small taste:
Phase A: Recovery
- Conduct a SWOT review and know where you need to put your money
- Model positive leadership (culture turns to behavior)
- Perform due diligence on customers and extend credit
Phase B: Accelerating Growth
- Ensure quality control keeps pace with the increasing volume
- Expand credit to customers
- Ensure you have the right price escalator; space out price increases
Phase C: Slowing Growth
- Know if your markets are headed for a soft landing or a hard landing
- Cash is king; beware of linear budgets and ensure you are not in denial
- Avoid committing yourself to long-term expenses at the top of the price cycle, but lock in revenue
Phase D: Recession
- Implement cost-cutting measures
- Offer alternative products with a lower cost basis
- Reduce advertising as consumers become more price-conscious
ITR counsels clients to plan at least one half Business Cycle ahead.
So why are we telling you all of this?
Because a change is about to happen! The overall economy has been in Phase B, Accelerating Growth, but the leading indicators show us a change is about to occur in 2022! Slowing Growth is ahead, and you need to be planning for it.
What Phase C strategies would apply to your business?
With a long list of standard business practices tied to Phase C of the Business Cycle, identifying which will work best for your company can seem daunting.
At The Great Game of Business®, our goal is also to help you navigate the economy's volatility. By looking ahead, you can plan for the changes headed your way. Our Certified Coaches can work with you to incorporate ITR’s research into your company’s forward-thinking planning cycle and help your business thrive regardless of which phase the economy is in.
“There is no bad Business Cycle Phase,” says Kimberly Clark, Vice President of Sales and Marketing at ITR Economics. “Each holds opportunity when you know it is coming. It’s knowing and acting accordingly that gives your business the advantage and creates success regardless of economic growth or decline.”
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