Economic Uncertainty. One of the main factors indicating that the U.S. may not experience strong economic growth in 2014 is its weak GDP growth.
According to Federal Reserve research, since 1947, when real GDP grows at a rate of less than two percent year-over-year, recession has occurred in the following year about 70 percent of the time.
In the first and second quarters of 2013, GDP in the U.S. grew by 1.1 percent and 2.5 percent respectively. Barclays forecasted that third-quarter GDP growth will be 1.5 percent, but it can be significantly lower because of the government shutdown.
The government shutdown can have a very real impact on the economy, putting its recovery in jeopardy.
Businesses are facing more policy uncertainty now than any other time since the debt-ceiling fiasco in 2011. The current monetary and fiscal uncertainty can result in a significant decline in investment and employment, and potentially lower economic growth rate by as much as one percent this year.
If that happens, the economy may be at stall speed by the beginning of 2014. According to some experts, there is a possibility that the U.S. will experience a recession next year.
2. A SNAPSHOT OF THE CURRENT BUSINESS
CLIMATE
Our overall economic outlook for 2014 is for moderate growth with U.S. GDP
increasing only 2.5% to 2.75%.
Expect a challenging hiring and job market to continue with unemployment
falling and finishing the year in the 6.5% to 6.7% range.
However, the workforce participation rate is at a 30 year low.
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3. A SNAPSHOT OF THE CURRENT BUSINESS
CLIMATE
A business closes or files for
bankruptcy every 53 seconds
A company changes control every
15 minutes
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4. A SNAPSHOT OF THE CURRENT BUSINESS
CLIMATE
26,000 new products and brands
are introduced every year
16%-30% of all consumers
change brand loyalty in one
evening of watching commercials
74% of consumers buy outside
their âfavoriteâ brand
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5. A SNAPSHOT OF THE CURRENT BUSINESS
CLIMATE
The average consumer is bombarded with more
than 4,000 commercial messages per day. And that
number is even HIGHER for business owners.
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6. A SNAPSHOT OF THE CURRENT BUSINESS
CLIMATE
Attention has become a
scarce resource in the
information economy. The
advertising and information
clutter only worsens when it
comes to your email In-box,
with countless hours
wasted with spam.
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7. DANGEROUS
TREND #1
E m p l oye e
Health Care
Costs
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8. EMPLOYEE HEALTH CARE COSTS
ïĄ Thereâs bad news for those
tired of the Af fordable Care
Act (Obamacare) - the
controversial legislation will
continue to be in the
spotlight throughout 2014.
ïĄ Small business owners will
need to move beyond the
hype (and their own
political views) and focus
on securing the most cost
ef fective health care plans
for themselves and their
employees.
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9. EMPLOYEE HEALTH CARE COSTS
ïĄ A recent Rasmussen Reports national telephone survey
finds that Americans Are More Pessimistic About 2014 and
About Their Health.
ïĄ At the end of the year that Obamacare made its official
debut, most voters still believe the law will drive up health
care costs, increase the deficit and hurt the quality of
health care in this country.
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10. EMPLOYEE HEALTH CARE COSTS
Under the ACA, Employers with fewer than 50 workers
don't have to offer health insurance, while those over 50
will either have to offer coverage or pay fines in 2015,
when the ACA's "employer mandate" kicks in. Most U.S.
citizens and permanent residents are required to either
have health coverage or pay a fine, which in 2014 is
either $95 or 1 percent of their income, whichever is
higher.
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11. EMPLOYEE HEALTH CARE COSTS
Plan to keep
current insurance
and think reforms
are good
13%
30%
7%
6%
Plan to keep
current insurance
but think reforms
are a bad idea
Plan to enroll in
new HC plan and
think reforms are
good idea
44%
Plan to enroll in
new HC plan but
think reforms are
bad idea
âą Weâve learned that over
4.7 million insured
have âlostâ their old
plan during Q4 2013.
âą Over 50% didnât like
the change even before
they lost their plan.
âą Now theyâre angry or
worried or both.
Don't know
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12. EMPLOYEE HEALTH CARE COSTS
What to do NOW?
ïĄ Know your obligations as a
business owner. How does
the ACA Health Care law
affect your financial position
and your employees?
ïĄ Evaluate which jobs require a
40 hour work week. If not,
can the job be done
effectively at less than 30
hours per week?
ïĄ Anticipate your most valued
employees demanding higher
wages to compensate for
their higher health care
costs.
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14. THE WIDENING SMALL BUSINESS DIGITAL DIVIDE
Research is showing a performance gap between small businesses that successfully
use technology and those that donât.
This small business digital divide means small firms unable or unwilling to deploy and
use technology â and especially cloud, analytics and mobile technologies â are
increasingly disadvantaged relative to their more technically savvy competitors.
2014 will see this divide widen as tech savvy small businesses use their technology to
cut costs and better connect to customers.
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15. THE WIDENING SMALL BUSINESS DIGITAL DIVIDE
Mobile, Cloud and Analytics technology trends has been
on CNNâs annual top 10 lists in some form for years.
And while each is important and powerful on its own, the
growing convergence of these technologies is amplifying
their impact and fundamentally changing how business is
done.
Theyâre also leading to new forms of technology-based
competition as more small firms use capabilities
developed through the convergence of these technologies
to out maneuver competitors.
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16. THE WIDENING SMALL BUSINESS DIGITAL DIVIDE
Most Small Businesses are racing to play catch-up with
companies that are prospering with Web applications that
establish interaction, dialogue and deep connections with their
Customers, Prospects, Employees and Partners.
The Internet has shifted the balance of power to the customer,
and companies that fail to empower customers â risk losing
them to competitors who are only a short click away.
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17. THE WIDENING SMALL BUSINESS DIGITAL DIVIDE
ïĄ It now costs 3X more
than it did in 1992 to
reach your
prospective buyers.
ïĄ In 1992, it took an
average of 4 attempts
to reach your buyer.
Today it takes 9+
attempts.
ïĄ Therefore you get one
half the results from
the previous same
efforts.
630-800-7545
10
9
9
8
7
6
5
4
Attempts
Costs
4
3
3
2
1
1
0
1992
Hawkeye Consulting Advisors, Ltd.
Today
17
18. THE WIDENING SMALL BUSINESS DIGITAL DIVIDE
What to do NOW?
ïĄ Consistently
communicate through
your network, what
makes you unique and
how it benefits them.
ïĄ Select a narrow ideal
target market and market
continually.
ïĄ Market through your
partner relationships to
benefit their network.
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20. WAGES GOING UP ACROSS USA
Starting January 1, 2014 minimum wage
workers in 13 states and four cities will see
higher paychecks.
While most of the increases amount to less
than 15 cents per hour, workers in places
like New Jersey, Connecticut, New York and
Rhode Island will see a bigger bump.
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21. WAGES GOING UP ACROSS USA
During 2013, New Jersey residents voted to raise the
state's minimum wage by $1 to $8.25 per hour.
Lawmakers voted to hike the wage by between 25
cents and 75 cents per hour, to $8.70 in Connecticut
and $8 in Rhode Island and New York.
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22. WAGES GOING UP ACROSS USA
Residents in Arizona, Colorado, Florida, Missouri, Montana,
Ohio, Oregon, Vermont and Washington will see a higher
wage floor due to annual cost of living adjustments.
The Economic Policy Institute, a left-leaning think tank, used
Census data to estimate that the increases will boost the
incomes of 2.5 million low-wage American workers next year.
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23. WAGES GOING UP ACROSS USA
What to do NOW?
ïĄ Evaluate worker
effectiveness.
ï§ What productivity
measures are in place?
ï§ How are these measures
communicated?
ïĄ Hire the right workers
who can and will do the
job right.
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25. INCREASED COMPETITION
& BUSINESS FAILURES
Did You Know� There are over 60,000 new businesses
started EVERY YEAR?
â SBA Training Network
96% of ALL businesses Fail within the first 10 yearsâŠ
80% of those Fail within the first 2 years.
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26. INCREASED COMPETITION
& BUSINESS FAILURES
ïĄ We were in the midst of the
largest entrepreneurial surge
this countr y has ever seen . FORTUNE: March 2007
ïĄ Nearly 672,000 new
companies with employees
were created in 2005. That
was the biggest business
bir thrate in U.S. histor y!
ïĄ 30,000 more star tups than in
2004, and 1 2% more than at
the height of dot -com hysteria
in 1996.
ïĄ More than 200,000 small
businesses vanished between
early 2008 and today.
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Today
2010
2007
2005
2004
1996
Start Ups
Hawkeye Consulting Advisors, Ltd.
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27. INCREASED COMPETITION
& BUSINESS FAILURES
ïĄ Wells Fargo/NFIB study:
Over the lifetime of a
business: only 39% are
profitable 30% break
even 30% lose money
with 1% falling in the
âunable to determineâ
category.
ïĄ Reasons Include:
ï§ Lack of sufficient capital
funding
ï§ Poor management skills
ï§ Lack of sales
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Net Income
1%
30%
39%
Profitable
Break Even
Lose Money
Don't Know
30%
Hawkeye Consulting Advisors, Ltd.
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28. INCREASED COMPETITION
& BUSINESS FAILURES
What to do NOW?
ïĄ Spend an hour per day
with your team working
on your business (not just
in it).
ïĄ Build a sound and tested
process for the way you
sell to your prospects and
add value to your clients.
ïĄ Create a workable plan
for strategically
marketing your business.
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30. LACK OF CASH FLOW
Cash flow is the lifeblood of your business. Without it, your business will
wither and die regardless of how many sales you've made or how much
money is owed to you.
As soon as cash flow fails to produce the surplus funds you need,
challenges arise and overwhelming stress can quickly follow.
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31. LACK OF CASH FLOW
Your primary responsibility as a business owner is to ensure the flow is
consistent with more money coming in than going out so a pool starts to form
to hold the overflow.
This overflow is what allows you to make early payments so you can benefit
from vendor discounts, to take advantage of special deals, capitalize on
newfound opportunities and easily cover unexpected emergencies.
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32. LACK OF CASH FLOW
ïĄ The #1 reason
businesses fail is a
lack of money.
ïĄ Accounts Payables
and Accounts
Receivables are at
record highs.
ïĄ The average collection
time for Accounts
Receivables have
increased by 40%.
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33. LACK OF CASH FLOW
ïĄ Small businesses are
highly dependent on
their cash flows so they
must either cut costs or
scramble to find
alternative funding if
they are not being paid
on time.
ïĄ With money tight and
bank loans hard to get
a cash-strapped
company can easily be
pushed to the brink. â
Wall Street Journal
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34. LACK OF CASH FLOW
ïĄHow much money do
you have
outstanding?
ïĄCollection Agency
ïĄLawyer
ïĄYourself
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35. LACK OF CASH FLOW
ïĄ Collection agencies
charge between 30%
and 50% of the
collected amount.
ïĄ Lawyers charge $100
to $500 per hour.
Even if you get a
judgment, you still
need to collect.
ïĄ It only takes a few
minutes of your time
if you have a plan.
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36. LACK OF CASH FLOW
What to do NOW?
ïĄ Invoice correctly at the
right price and in a timely
manner.
ïĄ Protect yourself with the
proper language on your
invoices.
ïĄ Build a sound and tested
process for the way you
collect on current and
past due invoices.
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Hawkeye Consulting Advisors, Ltd.
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38. THE NEXT STEP FOR THE
ASTUTE BUSINESS OWNER:
ïĄ Have a customized Business Assessment done to determine
the key leverage areas.
ïĄ Have your Lowest Cost / Greatest Reward Improvement
Strategies identified.
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39. T H E I N FORMATI ON C ON TAI NED I N T H I S E X E C UTI VE BRI E F ING
I S BROUG H T TO YOU BY
ïĄHawkeye
Consulting
Advisors.com
ïĄGet your own copy
of this executive
briefing
Empire Research / Growth Strategies
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