You Have to Hit it Full Throttle This Summer

While gathering around the barbecue with a cold beverage in hand this Holiday weekend, take a few moments to enjoy your good fortune. The weather is warm. You can swim outside in most parts of the country and week by week, month by month, the good news is outpacing the bad news.

According to a recent Business Confidence Survey by Insperity, small business owners are showing a willingness to hire more employees amid signs of expanding business activity.

·         More than 40 percent of the nearly 5,000 respondents said they are adding employees, up from 28 percent last October;

·         55 percent are maintaining current staffing levels, versus 63 percent last fall;

·         Only 5 percent are laying off employees, down from 9 percent in October and

·         28 percent think an economic rebound is currently in process versus 20 percent last fall.

Here’s what’s worrisome about this otherwise optimistic report; nearly three in four business owners STILL aren’t convinced that the economy’s on the mend. What else do you want?  A memo from the Commerce Department declaring, “Recession Officially Over—OK to Start Making Decisions”? Don’t hold your breath.

Financial markets are at historical highs, housing prices are at their loftiest level in 3-1/2 years, interest rates are at their lowest levels since most business owners have been alive and domestic business travel is up 5 percent over last year and above the all-time high reached in 2007 (Source: US Travel Association). That’s not enough for you?

Not only has economic rebound been “in process” for at least two years, it may be fading into the rear view mirror. When you think (and really feel) that everything’s fine, it’s usually too late. Your toughest competitors are way ahead of you anyway.

Sure the economy leads the list of short-term concerns for 62 percent of business owners, while government health care reform, and rising health care costs, are tied for second on the list at 51 percent, followed by hiring the right people, at 42 percent. Yet almost the same number (59 percent) expect sales to increase and 85 percent expect to maintain or increase employee compensation.

An Oxford Economics study found that companies that invested the most in business travel during the recession have grown faster than those that cut back on travel. Same goes for those that invested in marketing, product development, business development and hiring. You’ve got to keep your foot on the gas at all times and keep the pipeline full.

Macro View

Despite all the noise and confusion coming out of Washington (and the IRS), home prices rose to the highest level in three and a half years in April—up 11 percent over the same period last year. It was the fifth consecutive month of double-digit gains according to the National Association of Realtors. We were even more encouraged by this stat—the median time on market declined to 46 days from 62 days the previous month--which means properties are selling more quickly and inventory is shrinking.

Conclusion

As Seneca the ancient Roman philosopher once quipped. “Luck is what happens when preparation meets opportunity.” Whether it’s war, business, sports or courtship, nothing’s really changed that much in 2,000 years. Have a great barbecue this weekend and rest up. Summer’s the time to hit it full throttle. Waiting till after Labor Day to make decisions, isn’t going to cut it anymore.

Tags: National Association of Realtors, Insperity, Oxford Economics, US Travel Association

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