On unemployment. This morning CNBC posted a list of firms that have announced or pre-announced job cuts at their firms. The article appears under the heading, "Layoffs Continue to Grow—Is Your Firm on the List?" http://www.cnbc.com/id/28193752/page/2/ The article relates a sizable list of firms that have reported job increases, but does not state how many of these have already occurred, leaving us to guess on how many job losses might be yet to come.
On business capital availability. Despite the optimism voiced by market pundits that report that we are bottoming, or near a bottom, there is still no bottom in site. Businesses are dealing with a sharp drop off in demand since 9/15/08. Some businesses will not recover through Q4, and are expected to file bankruptcy in 2009. The only certainty is that the future is cloudy, capital is still tight, and for-profit businesses are seeking to jettison costs to get to cash-flow positive, or bust. On this note, I have observed recently that several companies operating on business models based on debt-based growth are now dead. Cool technologies are locked in bankruptcy, proving once again that supply does not create demand, and oversupply for goods that don't sell can be costly. The market sentiment towards debt has now come full circle. Vultures look ready to pick the bones of bankrupt companies for pennies on the dollar.
Nimbleness. In these times, it pays to be quick to respond, proactive in cutting costs, focusing spending on needs and not wants. There is opportunity, but you must be willing to get out of your comfort zone and seize it. The age of debt-based finance business strategies is over for a season, perhaps longer. Promising companies that appeared to have great technologies and rapid growth that were funded on debt are now falling fast. Calls from business owners looking to dump their cash-guzzling business units are increasing and there is little capital out there for continuing operations beyond factoring receivables, that assumes companies are indeed making money. Just like the Kenny Rogers line, you need to know when to hold them, and know when to fold them. Some business plans are dead now, and it takes a brave heart to move nimbly and thoughtfully to where the cheese has been moved.
Future opportunities. I mentioned in an earlier post that my own security consulting business experienced a 'lock-up' or freezing of pipeline of sorts since 9/15/08, as a sizable block of contract suspensions and stop-work orders were focused on future construction projects where the monies for job completion were uncertain. At the same time as the construction related pipeline was freezing, I noticed a small bounce in restructuring related security consulting opportunities, which bounce has now turned into a sizable bounce. Being nimble means being willing to move on from the old plan when it is not working. What is working today is focusing businesses on reducing operating costs through restructuring and replacing routine manned operations by automated processes where possible. Remote monitored and delivered business process business opportunities are huge. While the economy is clearly down, buildings, physical assets, and other operations frequently remain with tighter budgets -- and having a labor saving technology to automate routine processes to save time and money are the new rage.
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