Inflation down. Unemployment down. There you go, this week there has been some good economic news. Last week it was probably bad. To be honest I can’t remember. And as for the week before…..
But then again does it matter? We live in a media age where 24 hour news outlets are desperate for a story. Online, TV, radio, hard copy, everywhere you look. Any snippet of news will be magnified and analysed to the nth degree. Bad news is inevitably given a higher priority than good news. Everything, however trivial, is important for at least a few minutes.
I am often asked when preparing strategic plans how macroeconomic events should be taken into account. For example should GDP growth forecasts be factored into the numbers? How should inflation or unemployment predictions be accounted for? What should be made of interest or exchange rate trends?
My answer is always be aware of them and consider them but don’t let them rule your plan. They should form part of your PEST (Political, Economic, Social, Technological) analysis certainly. But when I am dealing with an SME I tend to get them to focus on their SWOT (Strengths, Weaknesses, Opportunities, Threats).I want them to think about what they can influence not about what they can’t.
Because smaller businesses have small market shares there are always opportunities to grow and be successful. It is about knowing your market and using your strengths to develop the right products and services to exploit your niche or expertise. Your strategic planning should focus on the resources and steps necessary to achieve this goal.
Alternatively it is about recognising the inevitable. If your offering is not right or your business is badly run no amount of positive economic news or GDP growth will lead to real success. Indeed positive economic news might lead you down a path that the fundamentals of your business are screaming at you not to follow.
External factors do come into play and it would be silly to pretend they don’t. But it is easy to be seduced by a stream of bad news into negative thinking. Many businesses are thriving at the moment. Concentrating on the basics of running a business well and on what you can control will give you your best chance of success and enable you to create your own headline. One you can control. At the end of the day it is up to you write your own news…..