Every six to nine years, the world economy experiences a slowdown or a flat growth period. Some of these adjustment times last longer than others, and some are more severe than others. Most, though, are mild and let businesses and the stock market adapt to changing times. These are not new happenings; the cycle has been going on for as long as business records have been kept— and maybe longer. It’s just a normal part of being in business, and nothing about it should create any extreme fear. You need to deal with these slowdowns when they occur and put business as usual on the back burner.
Not every economic slowdown is called a recession, but they should be treated as if one could be on the horizon. If the economy falls into a strong recession as it did in the early 1980s and circa 2008, you must be ready to cope with it if you want to have an ongoing business. Things can happen quickly, and news reporters always add fuel to the fire and make it sound worse than it really is. As a result, the public believes the news and cuts way back on spending, which makes the situation worsen. Then the snowball effect sets in, and the slowdown is seen everywhere. In more severe recessions, there can be an overall negative growth period that lasts from six months to as long as two years. Many jobs and businesses will be lost during this cycle.
I’m not an economist, but I’ve been through five or six of these economic slowdowns in my business career. I can tell you firsthand that none of them has been fun, and a couple presented serious challenges. What you have to realize is that these slowdowns are going to happen, and they will affect how you do your business. If you don’t adjust and pay attention to what’s going on in the economy and in your business, you could end up in a financial crisis. How do I know this? Because it happened to me early in my small-business career. I learned many lessons that I never forgot and will never ignore during any slowdown.