The Seasons of Business
Like farming, and there are lots of parallels here, the business climate exhibits a series of seasons that repeat about every 10 years or so.
During summer the “crop” is blooming and things are booming. In business, we are usually adding Team members and dealing with the abundance of work to do. The mistake here is that some think this will never end (such was the case in the last real estate boom) and they get reckless. A smart business leader is building cash during this time. (Right now U.S. corporations are sitting on a mound of cash AND they are not confident enough to let go of it.)
During fall the harvest comes in. In business we begin storing cash for the economic winter ahead. We gather as much in as possible. We review results, acknowledge the learning, and prepare.
During winter, only the “strong” survive. It is really obvious who did a good job during summer and fall. Many competitors will go by the wayside. This is also the time to unload (free up their future) underperforming Team that you brought on during last summer. This is a great time to buy (usually at great bargains) equipment or resources for the next upswing. It might also be the time to buy a struggling competitor at a great deal and assimilate their book of business (if it’s the right fit) into yours.
During spring, we sow the seeds (plant) for the next harvest cycle. We implement new marketing (remember to test and measure) and train the Team. We are full of confidence and anticipation because the “curve has turned”. We are optimistic.
Between business, real estate, and stocks, the movement and trends in each are signals of change ahead. For example, when your brother-in-law gets a real estate license (with no previous experience), we’re past the peak and when you see 100% mortgages, you can be sure the end of the real estate boom is near.