Friday, April 04, 2008

Doing increasingly more with increasingly less. Welcome to small business and difficult economies.

As an entrepreneur and small business owner there is one and only one constant that I've found, managing through in 35 years of widely changing economies.

We have to do increasingly more with increasingly less.

The chart in this piece was taken from financial analyst John Mauldin's great newsletter, which I highly recommend.

It shows all the official recessions we've had, charting from 1940 through 2010. Data is from the Federal Reserve Bank of St. Louis research.

You'll notice they haven't labeled the mess we're in as a recession yet. In one sense that sets up this piece. By the time recessions are finally labeled a recession, there is plenty of economic turmoil and badly wounded small businesses out there.

I think the reality of the graphic is that there should be a lighter gray fuzziness about 50% the width of each recession pasted on either side of the dark gray lines now showing. At a guess that might indicate about 1/3 of US economic history for my lifetime has been in difficult economic times.

I've lived through nine out of the last ten recessions. I've run small businesses through the last five; six if you count the current travails.

What I've learned is that under ALL circumstances, entrepreneurs and small businesses need to do increasingly more with increasingly less. Period.

This is not a call for beating your small business self up with more workload, more stress and less available time. It's just the opposite.

This is a message that the way you can get through this, and all the coming economic messes is to trust your gut and follow your smarts. You can do more with less. That's what our American economy does. It creates winners that produce better stuff using fewer resources.

This is a call for evaluating every small biz decision you make through the lens of physical and financial efficiency. Will this (any) decision help me to do more with what I have? Will this (any) decision help me to do more of what I do at a lower cost to me?

Proof of this is evident in the graph above. Yes, the remarkable march of predictable recessions is obvious and something to learn from.

But check out the rapidly rising curve in the background. That's gross domestic product. It's a big macroeconomic measure, and subject to all kinds of interpretation and parsing, but the fact of the matter is this GDP number shows our economy, you, me, all of us, producing increasingly more value with increasingly less input. This happens through good times and bad times and everything in between.

I have commercial self interest in this piece. I used the theme of doing increasingly more with increasingly less as the centerpiece of a seminar at my Technical College this week. The seminar was for an invited group in advance of an Entrepreneur Expo put on at the college that evening.

I used the seminar and the Expo to officially roll out the public beta of Diligence™, the small business workflow tool I've been building this past winter.

Spring is here. The days are brighter. There is yet another economic mess rolling through, and everybody needs to do more with less. Seems to me to be a great time to start another company.

I ran our last company, which was a manufacturing firm, through the deepest recession in manufacturing since the Great Depression. I didn't just run it, I grew it. When the US couldn't export anything I had customers on 6 continents. I hired a guy for a key new role in a month when there was only 1,000 new jobs added in the whole United States. I used my organizing approach to build a firm that was recognized by some of the most significant global small business awards available. I'm damn proud of all that. I loved attacking that situation with the only tool that will ever work. Then, or now. Efficiency.

Doing increasingly more with increasingly less. We did all that at my last startup with just 4 committed friends and the tools for doing more with less.

I'm really excited about making my new biz organizing tool available to others. I'll link to it below. More importantly, I'm excited for what it can do for folks looking to organize and grow their small businesses in this difficult environment.

It's a tool I've used myself to grow small enterprises through all the recent recessions and look forward to training others to use. Diligence™ is a tool that gives my small business peers the ability to do increasingly more with increasingly less. Sounds like a good idea whose time just keeps coming.

The rollout and introduction of Diligence™ my new tool for organizing small businesses.

Subscription page for John Mauldin's newsletter You can also search back archives by entering your eMail address. The newsletter the chart above was borrowed from is March 7, 2008, 'What's that hissing sound?''

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