More Are Concerned About The Business Outlook Than Are Prepared.
The results of our Business Outlook Survey are in and they show some interesting patterns. The great majority of respondents expect the costs of doing business to grow and the majority do not expect an increase in gross revenue. While a significant number of businesses have a plan and financial reserves in place to withstand an adverse business event, too many have put the planning off longer than they should.
Overall Outlook For Business
40% Described their business outlook as optimistic.
30% Described their business outlook as neutral.
30% Described their business outlook as pessimistic.
Specific Cost and Revenue Projections
83% Expect health Insurance costs to increase
83% Expect borrowing cost to increase.
47% Expect an increase in gross revenue.
Preparedness for Adverse Event
51% Have developed a plan to weather a substantial adverse event.
40% Have capital reserves or lines of credit to weather substantial adverse event.
Anecdotal comments include businesses that reported that tight credit is preventing them from fulfilling substantial, profitable orders for new product and others report that tightening credit may require scaled back operations.
Optimism and being prepared to take advantage of positive trends is important to maximizing profits. However, those who sail know that the best time to reef (reducing the amount of sails exposed to wind in a storm), is before one is in the storm. Similarly, business leaders who have managed companies through multiple economic cycles know that the best way to weather a tough cycle is to develop a plan and the necessary reserves (or line of credit) before the storm hits.
To the 40% that have developed a plan to weather a storm and established capital reserves (or lines of credit): Well done!
To the majority who have developed a plan and are in the process of building their capital reserves (or lines of credit): Good start, keep the course.
To those who have not yet developed a plan to weather a storm: Talk to your CPA or general counsel about where to get started or call our office to schedule a preparedness evaluation.