The US industrial economy is on track for imminent business cycle rise. If your company performance tracks coincidently with the US Industrial Production Index, our benchmark for overall domestic industrial activity, you’ve likely already felt the upside momentum in your business for at least several months. As you look forward to the rest of 2021, you need to ask yourself three important questions to make sure you stay ahead of the economic rising trend.
Ramping up in response to rising market demand requires access to and deployment of capital, and that’s just to keep up with increasing business prospects. You also need to invest for the future growth of your company, as the business cycle low point can present opportunities to do so. If you don’t have a lot of cash on hand, consider leveraging the low interest rate environment. Use someone else’s money to position your business to take full advantage of the rise in the business cycle this year.
When contemplating various investment opportunities, think back to the rising trend that followed the Great Recession of 2008–2009. Do you wish you had hired more people, bought that additional piece of equipment or machinery, or pulled the trigger on an acquisition? With the benefit of 20/20 hindsight as you look at the past 10 years, what do you wish you had done differently? Now, with the insight that the economy will be growing again, take this chance to do things differently today. Your future self won’t have to look back at this period, and the missed opportunities and investments, with regret.
Supply chain constraints are already impacting many businesses. As you plan for the rest of 2021 and beyond, you must proactively work to overcome any obstacles that may limit your upside potential. These limiting factors could include, but are not limited to, people, materials, components, inventory levels, and logistics constraints. Think back to the last business cycle peak in late 2018 and recall the challenges your business faced at that time. Are those same issues likely to be problematic this year? If so, how can you get ahead of those problems?
Answering these questions will have a beneficial impact on your company’s performance, not only in 2021 but also in the years ahead. We recognize that every industry and every business is unique and requires a tailored approach to strategic decision-making. We would love to talk to you about the specific considerations and needs of your company as you prepare to ramp up. Please contact us, and we'll have a fruitful conversation to help you make the most of this opportunity. Onward and upward!