A futurist’s look at what might happen for your business in 2010 — and some questions that could keep you thriving regardless of what happens.
There is no shortage of experts pontificating about the future this year. By now you have heard that the economy will take off like a bullet or will drop like a rock; health-care will pass or it will fail; and cap and trade will save the planet — but global warming is nonexistent. With so many conflicting opinions, who are you to listen to?
The best expert to listen to when it comes to how your business will perform in 2010 is yourself. You need to study and analyze what is happening in the world.
Instead of telling you what to expect, what we will do here is discuss some events that will likely happen in 2010. These possibilities will serve as a base for you to determine what course of action, if any, may be right for your business.
Healthcare
At this moment the healthcare bill is being negotiated in a joint conference of the house and senate. President Obama is highly focused on getting some type of bill to his desk for approval. Although the margin in the senate is one vote, chances are Washington will pass something in the way of a healthcare bill this year. This could occur between the writing and publishing of this article, in fact; it is that close to happening.
It is difficult to determine how the bill will specifically affect us since it’s unlikely that any one person has actually read all 2,400 pages of it. However, what we can expect is that the bill will result in dramatic changes to what we are all used to — especially business owners and managers.
What will a healthcare bill mean to you? Will it alter the way you offer healthcare to your employees? Will it increase your cost of doing business? Will it result in changes to your employees’ attitudes toward their own health? If so, will this affect their productivity? If you are a supplier to the healthcare industry, will these changes be positive or negative for your business?
Some example results to consider — though speculative at this point — would be taxes on “Cadillac” healthcare programs, elimination of current Medicare programs, and price caps and/or price reductions on certain medical equipment costs.
Cap and Trade
This is another project of President Obama. However, there is so much political capital being spent on healthcare reforms that the possibility of this getting approved in 2010 has diminished some. Still, the prospect of cap and trade measures is by no means dead.
What will this mean to you? If you or your manufacturer has a larger than acceptable carbon footprint, it will mean increased manufacturing costs, or even having to retrofit a facility with new energy technologies. It is likely to increase the cost of all sources of energy, again raising costs.
On the flipside, if you supply parts or materials for wind turbines or solar panels, this could be good news. It could mean an incredible boon to your business, if you are prepared to handle the increased demand for your parts. What do you need to do now to properly position yourself to take advantage of the change in policy?
Bank Failures
The FDIC is predicting that 2010 will see more bank failures than 2009, which totaled 140 bank closures. Just to prepare for the expected increase, the FDIC is hiring 1,600 new employees. This number could itself expand, if the year is worse than expected.
What will more bank closures mean to you? Is your bank on this year’s list of troubled institutions? Although the list is not published, you can look up your institution on websites like bankratemonitor.com (find the “bank ratings” link, usually at the top right of the site), and see how your bank is rated. If your bank failed and was not acquired by another institution, your insured deposits are only covered up to $250,000.
If you are depending on lines of credit to run your business, a failure at your bank could mean a sudden stop of your financing. Could this problem run deeper for you? What if your suppliers lose funding? What if your customers lose financing?
This would be a good time to analyze all of the ways that banking issues may affect you. It is also a great time to develop a plan B so a bank closure does not take such a devastating toll on your business — and could even become an opportunity. After all, with every problem comes an opportunity; that’s just as true with the banking industry as with any other. Being prepared to spot and take advantage of the opportunity is the key.
As an example, let’s say that your major competitors rely heavily on borrowed money while your firm has a solid cash position. Is this a chance for you to leverage your cash advantage to squeeze your competitors out of some accounts?
SKU Rationalization and Vendor Reduction Programs
All the major retailers are working toward a reduction in the number of vendors from which they purchase. Retailers have determined that dealing with fewer vendors reduces their cost of business; now more than ever, reducing the cost of doing business is on the minds of all retailers. This same process is happening among manufacturers, too.
What will this mean to you? Small manufacturers and reps will need to work hard to make and sell products that are unique and necessary. For consumer products this means building your brand recognition through effective advertising and marketing. For business-to-business products, superior innovation and engineering will be required to stay ahead of industry giants, and top-notch customer service will become an absolute must.
Higher Taxes
There are numerous proposed taxes floating around Washington right now that there is no possible way to determine which ones will take effect. However, you can bank on one thing: your taxes will increase.
We know that the marginal 35% rate will increase to 39.5% this year if congress does nothing, due to the sunset on the Bush tax cuts. Now factor in possible healthcare taxes, war taxes, tax-the-wealthy taxes and all the other ones out there we don’t yet know about.
Add to this the fact that many states are in deep financial trouble and will be looking to increase revenue in any way possible. This problem even trickles down to the county and municipal levels, which have been cash strapped since at least the housing crash.
So what will increased taxes mean for your business? The only certainty is you will keep less of what you make. Do you need to adjust pricing to compensate for the tax increases? Should you be starting your 2010 tax planning right now, so you are better prepared? Can you relocate some of your operations to states with more favorable tax policies?
On the upside, Washington is looking to create jobs. With that consideration, investigate to determine if there are enterprise zones in your area that can offer you tax abatements.
Can you qualify for any tax credits for hiring new employees? How about research and development credits? A little digging could help you discover clever ways to minimize the hurt that increased taxes will put on your business.
Terrorism Attempts and Air Travel Security Will Increase
By now the increase in terrorist activity in the U.S. is apparent. Not only do we have foreign nationals trying to blow up airplanes by setting their underpants on fire, but we also have an issue with homegrown terrorists.
What will this mean to you? Do you travel a lot? If so, how will the increase in security affect your travel time and plans? Will the longer check-in times cause you to change your schedule or travel patterns? Will you have to reconsider the distance you are willing to drive rather than fly? Is it time to rethink video conferencing?
On the other hand, can increased security be a benefit to you? Do you make or sell products for the security industry? Do you have geographic advantages over your competitors on which you can capitalize, assuming your competitors will have to rethink their travel strategies? Is this the time to open new satellite offices to retain your current business or chase new leads?
Corporate Bankruptcies Will Continue at Record Levels
Last year saw record numbers of business failures, and 2010 will see this high level of failures continue. What will this mean to you?
You need to consider the potential fallout of all the other businesses closing shop. It could mean another opportunity — if you are prepared.
Are some of your competitors failing? Can you start to grab market share from them right now? What about buying out assets or product lines from struggling companies?
Will there be highly skilled people looking for new opportunities as businesses fail? Will these people become competitors, or can you make them assets for your own business’s growth?
By now you may be thinking that I am predicting a terrible year. That is really not the case. On the surface, these predictions might appear to be negative and, for the most part, this is true.
That does not mean they have to be negative for you, though. As you may have realized, even the most negative of events can create sizable opportunities for those who are capable of seeing the positive side — and are prepared to seize it.
We should never live in fear of the future, because fear can cripple your business and doom you to failure. Fear is the only human emotion that is based on the future. It is impossible to fear the past or, for that matter, the present.
For example, imagine that you are standing on the edge of the Grand Canyon, your toes hanging over the edge as you look down at the great drop off before you. You are not afraid of standing; you are afraid of falling — which is the possible future, but a version of the future nonetheless.
Now see yourself going over the edge of the canyon. You are no longer afraid of falling (the present); you are afraid of landing (the future). Next imagine that you are wearing a parachute, and you pull the cord and gently sail to the bottom. You are not afraid of landing because you were prepared for the possible future; and because you were prepared, you had nothing to fear.
Obviously, a new year brings new challenges, new concerns and new events to deal with. Some of them will be predictable and others will come as a surprise. As long as your parachute is packed, so to speak, and you are ready for whatever may come, 2010 could mean bold new opportunities for your business — and a future you can face without fear or trepidation.
— With Robb Taylor
