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A Difficult Economy What Should We Do? Asa J. Beck, CPA President, Cogent Strategies, LLC Member of Policy Committee, Coal...
What is Happening? <ul><li>The economy will improve, it will be bumpy </li></ul><ul><li>Some banks are headed for trouble,...
The Banking System <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Data is from the Federal Res...
Deteriorating Condition of Creditors <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Data is fr...
Economic Factors <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Source  :  Bureau of Labor Sta...
Economic Factors – U6 Unemployment <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul>Source  :  Bureau of...
Economic Factors – Manuf. Employment <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul>Source  :  Bureau ...
Economic Factors <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Source  :  Bureau of Economic ...
Economic Factors <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Source  :  US Census Bureau ht...
Economic Factors <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Source  :  US Census Bureau ht...
What Can We Do    Make Adjustments <ul><li>The economy continues to struggle </li></ul><ul><ul><li>Have a cash reserve </...
So What Can We Do <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>A crisis is a terrible thing ...
So What Can We Do <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Understand your business. </l...
What Can We Do    Make Adjustments <ul><ul><li>“ Do what you should have been doing all along” </li></ul></ul><ul><ul><li...
Denver Business Advisors <ul><ul><li>Provide free professional services in law, accounting, management, and Sales/Marketin...
Trade and Industrial Base are Key <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Source  :  Bu...
Our Borrowing is Out of Control <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul>Source  :   White House...
US Dollar Will Continue to Weaken <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul>Source  :   US Federa...
Government Policies Impacting Economy <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>Be active...
We Must Make More of What We Use <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul>From international Mon...
Trade Balance by Country <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul>From United States Internation...
So What Can We Do <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><li>With Weakening Dollar Buy Clo...
So What Can We Do <ul><li>Cogent Strategies, LLC  www.cogentstrategies.com </li></ul><ul><ul><li>Find a domestic source fo...
Summary <ul><li>Be profitable and cash flow positive </li></ul><ul><li>Tune up your business now </li></ul><ul><li>Keep cl...
<ul><li>Questions and Answers </li></ul><ul><li>Contact information: </li></ul><ul><ul><ul><li>Asa J. Beck, President Coge...
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Economy 9 17 2009

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Transcript of "Economy 9 17 2009"

  1. 1. A Difficult Economy What Should We Do? Asa J. Beck, CPA President, Cogent Strategies, LLC Member of Policy Committee, Coalition for a Prosperous America Cogent Strategies
  2. 2. What is Happening? <ul><li>The economy will improve, it will be bumpy </li></ul><ul><li>Some banks are headed for trouble, again </li></ul><ul><li>Unemployment is high and will likely go up </li></ul><ul><li>Their should be growth in this quarter </li></ul><ul><li>The trade deficit is better, but still high </li></ul><ul><li>The federal deficit is out of control </li></ul><ul><li>You can take steps to do well, even now </li></ul><ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>
  3. 3. The Banking System <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Data is from the Federal Reserve http://www.federalreserve.gov/releases/h8/data.htm </li></ul>
  4. 4. Deteriorating Condition of Creditors <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Data is from the Federal Reserve http://www.federalreserve.gov/releases/chargeoff/ </li></ul>
  5. 5. Economic Factors <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Source : Bureau of Labor Statistics, Current Population Survey </li></ul><ul><li>http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?request_action=wh&graph_name=LN_cpsbref3 </li></ul>Source : The Conference Board http://www.conference-board.org/economics/ConsumerConfidence.cfm Unemployment is a lagging indicator it should go higher before it is through
  6. 6. Economic Factors – U6 Unemployment <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>Source : Bureau of Labor Statistics http://data.bls.gov/PDQ/servlet/SurveyOutputServlet This measure includes those who have not looked for work in last four weeks and those that have part time jobs for economic reasons
  7. 7. Economic Factors – Manuf. Employment <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>Source : Bureau of Labor Statistics http://data.bls.gov/PDQ/servlet/SurveyOutputServlet Manufacturing employment has fallen precipitously over 5M jobs in 10 years
  8. 8. Economic Factors <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Source : Bureau of Economic Analysis http://www.bea.gov/briefrm/gdp.htm </li></ul>
  9. 9. Economic Factors <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Source : US Census Bureau http://www.census.gov/const/soldreg.pdf </li></ul>
  10. 10. Economic Factors <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Source : US Census Bureau http://www.census.gov/cgi-bin/briefroom/BriefRm </li></ul>
  11. 11. What Can We Do  Make Adjustments <ul><li>The economy continues to struggle </li></ul><ul><ul><li>Have a cash reserve </li></ul></ul><ul><ul><li>If you don’t have one, create one </li></ul></ul><ul><ul><li>Borrowing to create a cash reserve is ok </li></ul></ul><ul><ul><li>Conserve capital and contain costs </li></ul></ul><ul><ul><li>Be sure you make a profit with positive cash flow </li></ul></ul>
  12. 12. So What Can We Do <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>A crisis is a terrible thing to waste </li></ul><ul><ul><li>Disruptive circumstances provide opportunity to look at your business in new ways. Change your perspective. </li></ul></ul><ul><ul><li>Be assertive, go after the clients and business </li></ul></ul><ul><ul><li>Your business will require active management just to keep pace </li></ul></ul>
  13. 13. So What Can We Do <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Understand your business. </li></ul><ul><ul><li>Assess what your customers truly value </li></ul></ul><ul><ul><li>Make a new plan based on today’s reality </li></ul></ul><ul><ul><li>How are you better than your competition </li></ul></ul><ul><ul><li>Measure & adjust, then do it again </li></ul></ul>
  14. 14. What Can We Do  Make Adjustments <ul><ul><li>“ Do what you should have been doing all along” </li></ul></ul><ul><ul><li>Be sure you hold on to your best people </li></ul></ul><ul><ul><ul><li>Train or coach those who are good </li></ul></ul></ul><ul><ul><ul><li>Consolidate positions or replace others </li></ul></ul></ul><ul><ul><li>Have Key Performance Indicators (KPIs) </li></ul></ul><ul><ul><ul><li>Perform for the short-term, plan for the long-term </li></ul></ul></ul><ul><ul><ul><li>Be ready for a “Double Dip” recession </li></ul></ul></ul>
  15. 15. Denver Business Advisors <ul><ul><li>Provide free professional services in law, accounting, management, and Sales/Marketing </li></ul></ul><ul><ul><ul><li>Maximum of three hours for each company from each person in a two month period </li></ul></ul></ul><ul><ul><ul><li>Can help businesses that need a little guidance </li></ul></ul></ul><ul><ul><ul><li>It is their way of giving back to the community </li></ul></ul></ul><ul><ul><ul><li>www.denverbusinessadvisors.com </li></ul></ul></ul><ul><ul><ul><li>Details are listed on the web site </li></ul></ul></ul>
  16. 16. Trade and Industrial Base are Key <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Source : Bureau of Economic Analysis http://www.bea.gov/briefrm/gdp.htm </li></ul>
  17. 17. Our Borrowing is Out of Control <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>Source : White House Office of Management and Budget http://www.whitehouse.gov/omb/budget/Historicals/ US Census Bureau, Foreign Trade Division http://www.census.gov/foreign-trade/statistics/historical/gands.txt Estimates for 2009 are based on the Trade Deficit for the first seven months of 2009 as an estimate of the full year. The Federal deficit is for the fiscal year ending 9/30/2009 supplied by the Office of Management and Budget.
  18. 18. US Dollar Will Continue to Weaken <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>Source : US Federal Reserve http://www.federalreserve.gov/releases/h10/Summary/ The value of the US Dollar will continue to fall in relation to other currencies due to are large deficits making imports more expensive and domestic products more competitive over time.
  19. 19. Government Policies Impacting Economy <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>Be active and help drive change </li></ul><ul><li>Countries continue to manipulate their currencies </li></ul><ul><li>Border adjustable Value Added Taxes add to the challenge </li></ul><ul><li>Imports need to be held to same standards of quality and safety as domestic companies </li></ul><ul><li>Push back on anything that will raise expenses or increase debt </li></ul>
  20. 20. We Must Make More of What We Use <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>From international Monetary fund 1980 to 2008 http://en.wikipedia.org/wiki/File:Cumulative_Current_Account_Balance.png
  21. 21. Trade Balance by Country <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>From United States International Trade Commission http://dataweb.usitc.gov/scripts/cy_m3_run.asp Country Imports Exports Balance Millions of Dollars 2008 China $337,504.2 $67,165.9 ($270,338.4) Canada $334,839.6 $222,424.4 ($112,415.2) Mexico $216,328.4 $131,507.4 ($84,821.0) Japan $139,112.3 $61,435.2 ($77,677.1) Germany $95,827.9 $50,150.5 ($45,677.4) Saudi Arabia $54,282.8 $11,845.8 ($42,437.0) Venezuela $50,281.2 $11,829.3 ($38,451.9) Nigeria $38,236.2 $3,990.6 ($34,245.6) Ireland $31,298.1 $8,080.1 ($23,218.0) 4759.--Italy $36,015.2 $13,896.4 ($22,118.7) Country Imports Exports Balance Millions of Dollars 2008 Netherlands $21,102.5 $37,076.2 $15,973.7 United Arab Em $1,267.5 $14,620.0 $13,352.5 Australia $10,534.8 $20,948.2 $10,413.4 Singapore $15,718.5 $25,655.5 $9,937.0 Hong Kong $6,496.3 $15,880.9 $9,384.6 Belgium $17,378.5 $25,768.7 $8,390.2 Turkey $4,641.1 $10,277.1 $5,636.0 Panama $373.7 $4,614.6 $4,241.0 Egypt $2,343.6 $5,969.8 $3,626.3 Chile $8,182.3 $11,366.5 $3,184.3
  22. 22. So What Can We Do <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><li>With Weakening Dollar Buy Close to Home </li></ul><ul><ul><li>It is not easy, but usually you can </li></ul></ul><ul><ul><li>Think of your spending like votes </li></ul></ul><ul><ul><li>Japan, Germany, & UK Manufacture, why </li></ul></ul><ul><ul><li>Citizens buy in their own self interest </li></ul></ul><ul><ul><ul><li>Food, meat, produce, and dairy </li></ul></ul></ul><ul><ul><ul><li>Automobiles, computers, & yard equipment </li></ul></ul></ul><ul><ul><li>As dollar weakens, imports will cost more </li></ul></ul>
  23. 23. So What Can We Do <ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul><ul><ul><li>Find a domestic source for products </li></ul></ul><ul><ul><li>If they are too expensive buy a little now </li></ul></ul><ul><ul><li>Bring any off shoring of jobs back home </li></ul></ul><ul><ul><li>Labor is more than just rate it is units too </li></ul></ul><ul><ul><li>Getting ahead on labor while unemployment is high will be viewed later as a smart move </li></ul></ul>
  24. 24. Summary <ul><li>Be profitable and cash flow positive </li></ul><ul><li>Tune up your business now </li></ul><ul><li>Keep close to your customers </li></ul><ul><li>Performance will mean cost controls, how is important </li></ul><ul><li>Have a cash reserve and preserve it carefully </li></ul><ul><li>Spend your money close to home </li></ul><ul><li>End labor off shoring while labor is plentiful </li></ul><ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>
  25. 25. <ul><li>Questions and Answers </li></ul><ul><li>Contact information: </li></ul><ul><ul><ul><li>Asa J. Beck, President Cogent Strategies, LLC 303-459-4870 [email_address] </li></ul></ul></ul><ul><li>Cogent Strategies, LLC www.cogentstrategies.com </li></ul>
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