--- title: For Better Strategic and Financial Planning, Use the Business Cycle description: Optimize strategic and financial planning with insights into the business cycle, helping you make informed decisions on staffing, capacity, and investments. image: https://blog.itreconomics.com/hubfs/01%20Brand%20Message%20-%20Instagram%20-%201080_566%20-%20v2-1.png --- Solutions # For Better Strategic and Financial Planning, Use the Business Cycle Optimize strategic and financial planning with insights into the business cycle, helping you make informed decisions on staffing, capacity, and investments. [ Lauren Saidel-Baker ](https://blog.itreconomics.com/blog/author/lauren-saidel-baker) Jul 10, 2019 --- Since I joined the team at ITR Economics, my background in the asset management industry has positioned me as the in-house point person on financial matters. This article is for those readers who are involved in financial planning and budgeting for their companies. We find that professionals in these roles, regardless of sector or industry, share a core set of related questions. These questions might center on staffing levels and when to hire, whether to increase capacity, when and under what payment terms to make machinery purchases, or when to lock in raw materials costs. ## A Shared Set of Financial Decisions, One Strategic Question Although they sound disparate at first, most of these questions boil down to one underlying theme: when and how to implement strategic decisions. Ultimately, the solution lies in understanding the business cycle and knowing where your company, your industry, and the macroeconomy are in that framework. At ITR Economics, **[we divide the cycle into four distinct phases based on rates-of-change.](http://itreconomics.com/methodology)** Strategic decisions that would advance your business during one phase may be inappropriate during a different phase. Expansions, for example, are often undertaken when growth rates are at their highest and firms are feeling the pinch of capacity constraints. However, implementing these projects at the peak of the business cycle is often a sign of overexpansion. The expanded capacity may come on line just as growth rates begin to decline. Equipment purchase agreements or loan terms and their attendant payment schedules can then create cash-flow problems, further compounding difficulties. Your understanding of cyclical trends should empower you to proactively look ahead to what is coming next, not limit your view to the present.  ## Turning Cyclical Downturns into Competitive Advantage The trough of the business cycle – when growth rates are low or even negative - can be an effective time to initiate capital improvements, though it may seem counterintuitive. There may be more downtime for both your workforce and machinery; you can dedicate time and attention to equipment installation or related training requirements without detracting from needed production. With your improvements in place when recovery or accelerating growth trends return, you will be able to hit the ground running and stay ahead of competitors. Additionally, the efficiency gains that result from these improvements often yield greater cost savings, likely to be a major benefit during the back side of the next business cycle. [![  Sign up for our Trusted Insights newsletter!    Receive the latest videos, blogs, news, partner updates, and more from ITR Economics every week. Sign up today to stay informed.  ](https://no-cache.hubspot.com/cta/default/4424930/interactive-185714257427.png) ](https://blog.itreconomics.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKxSWSoH%2BthOumdBB8u9RlysdSj7NCBTyI%2F1u2cjXY7XcFhNuHgtRxFRSaTlYm2EieaxhBUUVB6r6VaQNBoCkGtuf3M2EXQE1Qc2%2BCxFIa%2FD2RZTXfMstnD78%2FnD%2FqN7zzY2YUZtvV81aGpPgM%2FxErhCqd9S%2F8BIebx3OrKENv%2Fz3MmnNVgbxnPU7T6o%2B%2BTsIo%3D&webInteractiveContentId=185714257427&portalId=4424930)   **Post written by ITR Economist and Speaker Lauren Saidel-Baker, originally published in June 2019.* [Solutions](https://blog.itreconomics.com/blog/tag/solutions) ## Similar posts Solutions ### [Director's Cut: How Healthy Is the EU Without the UK?](https://blog.itreconomics.com/blog/directors-cut-how-healthy-eu-without-uk) The key takeaway is that both economies, the UK and the EU as a whole, are large and stable; they will move beyond the near-term speculation to... Jackie Greene Apr 25, 2019 Solutions ### [Director's Cut: World Industrial Production Fell – Hard!](https://blog.itreconomics.com/blog/directors-cute-world-industrial-production-fell-hard) Many of the economies around the world are also on the back side of the business cycle, and further decline is likely. Jackie Greene Feb 25, 2019 Solutions ### [Director's Cut: Is It Time to Invest in Mexico?](https://blog.itreconomics.com/blog/directors-cut-time-to-invest-in-mexico) Despite optimistic expectations, Mexico Industrial Production only grew 0.2% in 2018 and actually started contracting during the last 2 months of the... Jackie Greene Mar 26, 2019 ### Free Economic Updates from ITR Economics Hear the latest economic news from our experts, stay in the know with our frequent blogs, and get a first look at ITR Economics’ latest promotions – all free with our economic updates! 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