Right now it is being whispered: The recession is coming, the recession is coming. Opinions vary on how the economy is doing and what we can expect in the next 12 to 24 months.
If you are in the car business, your crystal ball is very cloudy indeed. Among dealers, opinions are mixed. And take a look at the factories and you'll really get confused. The amount of incentives that General Motors is offering on its trucks is nothing short of staggering, and GM wisely plans a shutdown this summer. Ford, meanwhile, plans to ratchet up its truck production.
Who's right? Who's wrong? It is anybody's guess.
No one knows what the economy holds, but make sure you don't talk yourself into a private recession. It strikes me that the best approach at a time of such uncertainty is to steady the ship and assume that sales this year and next will be flat or slightly lower—but not a disaster.
The big problem for most retailers is that they are dependent on what the factories think is going to happen and, with multiple franchises, one owner could get mixed signals from different brands.
Still, it may be a good time to take a look at your operation and see about cutting the fat. Everybody has a lot of excess costs and when things are great, who cares? You can afford the excess. But regardless of what the economy does, trying to get leaner is always a good thing, and the potential for a mild downturn gives you an opportunity to slim down.
We are not looking at a repeat of 2008. Modest decline is a lot different from disastrous. If you keep running your business like it's going to be a pretty good year, chances are that you'll be right. If you cut to the bare bones, it will be lousy without a doubt.
Chances are good that you'll be able to make your own future. It will be up to you.
Keith Crain is the chairman of Crain Communications Inc., parent company of Rubber & Plastics News.