Lane Cardwell

Business Outlook And Trends (BOAT)

I tend to get a little too focused on the restaurant industry as I go about my week. I come into contact with people in a lot of other industries on a daily basis, either as a customer or just random meetings, but don't often take the time to inquire as to the health of their businesses. I usually either let the media inform me, or just assume that everyone is doing better than those of us in the restaurant industry. I made an exception during this Memorial Day weekend and asked everyone that I talked with about their business situation. The overall sales trends reminded me of a Yogi Berra quote.  "If they don't want to come, you can't stop them."
 
I spent the weekend at a marina on a lake near Dallas where I have gotten to know a lot of people over the past 13 years. If you want to see the U.N. of business people, talk to boaters. They run the gamut from small start ups, sales, executives, owners of big businesses, and everything in between. I never knew that there were so many ways to make a good living until I started spending time near the water.
 
I want to put this into perspective. This highly informal survey took place in a city that has had very little effect from the housing bubble. Texas has ranked in the bottom five states for the past few years in home appreciation. We were barely holding on to current values, much less seeing them appreciate wildly over the past decade. When we feel the effects of the economy, it is from everything but housing appreciation.
 
My findings:
 
Car dealership owner. "The only people buying right now are those that have to, and those that aren't able to. The finance department weeds out the second group, and all the dealers fight over the first group. I am losing experienced car salesmen who can't make enough to live on."

National snack foods executive. "We have 13,000 vehicles on the road. When gas goes up, everyone in the company feels it. We have seen huge increases in oils, corn and wheat. We are faced with staggering price increases on our products in the next few months. The problem is we sell snacks and people can live without them."

Foundation repair business owner. "Every project that we were close to signing has been pushed back.  People say that if the house hasn't collapsed yet, it can wait a few more months. I am paying experienced crews to do nothing because I can't afford to lose them.  But I can't afford to keep paying them like this for long."

Complex software salesman. "Our deal flow has slowed to a trickle. Every big business is reevaluating their major expenditures and pushing them back whenever possible. I can't even get people to meet with me, much less buy from me."

Dry cleaner chain owner. "Business is way off and costs are way up. We are seeing a 15%-20% drop vs. prior year and our primary costs for hangers and plastic wrap are up almost 50%. I have never seen it like this in almost 25 years."

Key card door entry systems owner. "Most hotels are only replacing what is broken, not looking to upgrade anything that still has some life left on it. We had some major deals to replace some existing hotel systems and those got shelved due to budget cutbacks. It's going to be a slow year."

You get the idea. It's not pretty out there. I can't even imagine the conversations going on in marinas in South Florida, Phoenix, Las Vegas, or Southern California. These are areas where housing foreclosures are high, and making everyone else nervous. I know that you are hearing this from a lot of people, but now is the time to make sure your business is operating as well as possible. People are only doing business with businesses that provide a strong value.
 
The economy, and it's effect on people right now, reminds me of another Yogi Berra quote. "Slump? I ain't in no slump...I just ain't hitting."

Posted by Lane Cardwell on May 27, 2008 | Comments (5)