Squirrels, Nuts and Business Cycles
You might think that our title has something to do with the recent behavior of Wall Street and Washington. It probably could, but in this case, it doesn’t.
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It does refer to seasons. We’re in the Midwestern United States. We’re heading into fall which, of course, means winter is just around the corner. Squirrels are busy hoarding up nuts so they will have the food they need to sustain them through the winter months.
Hot and cold, boom and bust
Like the seasons, our economy moves through times when things are hot and times when they’re cold. We experience booms and busts.
It’s interesting, though, that our friends in the southern hemisphere are just heading into spring. Things are heating up there while they’re cooling down here! It reminds us that most businesses do best during the boom times, but some actually prosper when times are tough.
Almost every business has products or services that will do better when the economy isn’t doing as well. With your offerings, which ones will save your clients money? Those are the items you should promote now as consumers seek to stretch their budget.
Your cash stash
Speaking of stretching our budgets, just like squirrels hoarding nuts for winter, we should all make sure we have an emergency cash reserve. Financial planners recommend keeping between three to six months of living costs stashed safely away for ready access.
In recent times, some have suggested a Home Equity Line-of-Credit could be substituted for this cash reserve. Only you can decide if that’s the right option for you; however, with what’s going on with banks and the credit markets, it may pay not be your best option for your crucial cash stash.
If you own a business, you should also look at your working capital. Is it adequate to take you through a slow season? If not, look for ways to cut your costs so you can shore up your cash hoard.
Purchasing out of season
The seasons also create opportunities for us when we’re purchasing. For example, if you live where we live, you’ll probably get a better deal right now on a lawn mower than a snow blower. Timing your purchase when demand is down on these bigg ticket items can save you money.
Tougher times also create opportunities for us as consumers. Businesses still have bills to pay. They want to keep the doors open. So they may cut deals now that they would never consider in good times.
Purchasing in season
With other items, you’re better off buying in season. Retailers will often lure you to their stores by drastically discounting these items. For example, isn’t turkey cheaper right before Thanksgiving than any other time?
Time Money has a great article about the best time to buy everything. Planning when to buy is just as important as what you buy. Buying on impulse less often will save you BIGG money more often!
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Next time, we ask, “Are you a victim of your own success?” Until then, here’s to your bigg success!
(Image by tome213)
