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Transcend Economic Cycles

Jan 08, 2010

In Scott Peck’s 1978 bestselling book, The Road Less Traveled, one simple paragraph states “Life is Difficult,” a principle also taught by the famous Chinese philosopher, Confucius.  While seemingly pessimistic, the opposite is true as explained by Peck, since a person transcends beyond life’s challenges when understanding this and preparing for the difficult times ahead.  Having an awareness of economic cycles and understanding how this information can be used, is a valuable tool for the Wyoming entrepreneur who can transcend beyond ostensibly flippant swings in the economy.

 

The four stages (known by various names) are: growth, pinnacle, decline and trough.

 

Growth is the stage we all love.  This is when a business sees a continued increase in its gross sales (and hopefully net profit) and a country sees an increase in its gross domestic product (GDP).  These are good times.  People feel happy and secure.  They have jobs and disposable income to support their lifestyle, which often increases during this period too.

            The Pinnacle stage is the top where the “boom” comes to an end.

            Decline, also called recession, is when there is a decrease of some of the things we need the most like jobs.

            The Trough (bottom) is the fourth stage.  Arriving at this stage is good news even though negative effects of the decline stage are not quickly overcome.  This is when a recession is reversed into a period of growth.

So why is it important for a small business owner to know this?  So the small business owner can prepare.

 

            I propose two strategies to use in order to transcend beyond difficult economic changes.  The first strategy is to tirelessly research and experiment with new ideas, products, services and markets, and watch the competition.  Wyoming’s finest entrepreneurs never stop seeking and researching new ideas.

 

The second strategy is to save money when times are good.  When the growth stage occurs, it is human nature to go on lavish vacations, and buy new, bigger homes and pickups.  These things can be good after all, since contractors and car dealers need income too.  But, as an long time Wyoming entrepreneur and client of mine recently told me, “When times are good, keep your money close to your chest, ‘cause you’ll soon need it.”

 

            Wyoming Entrepreneur of the University of Wyoming, can assist Wyoming entrepreneurs research and investigate new ideas.  Our service is free.  

 

Mark Atkinson



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