Entrepreneurs Ask: Will the Downturn Ever End?This week's stock-market crash(es) and downgrading of America's credit rating leave business owners asking: Is this the new normal?
ByCarol Tice•
Opinions expressed by Entrepreneur contributors are their own.
The past week was enough to rattle even the most optimistic small business owner.
The stock market tanked as the debt-ceilingdebate dragged on, and didn't let up even after an agreement was reached. Then ratings agency Standard & Poor's downgraded the U.S.'s debt rating, and all heck broke loose in the financial markets: The Dow Jones Industrial Averageplunged 400 pointson Monday -- forcing the Fed on Tuesday to make an unprecedented promise to keep its key short-term interest rate near-zero through 2013. Stocks shot up, as a result. Today, however, those gains have all but disappeared.
It's a bit like being on a Tilt-a-Whirl ride. The worrisome thing is, if the stock slide turns into a prolonged malaise like we saw in 2008, little can be done to stop a major economic implosion.
Many of thestrategies the federal government can put into playto try to stabilize the economy and encourage job growth were done long ago. The U.S. Chamber of Commerce called it "theworst-performing recoveryin the post-WWII era" even before last week and notes that, at this point, we'd have to create nearly a half-million jobsevery monthto return to pre-recession employment levels a year from now.
All of which raises the question: Will the downturn ever really end, or is this the new normal?
It's hard to tell whether it's just a crazy week or the start of another round of stubborn economic doldrums. Prior to this week's rollercoaster ride, business owners were already in a pretty cautious mode. A recently releasedNational Retail Federation Studyshowed retailers are anticipating shoppers will spend slightly less on the critical back-to-school season than they did last year.
In other words, retailers were betting against a rebound in consumer confidence even before last week. Along the same lines, the July Ceridian-UCLA Pulse of Commerce Index released today -- which monitors the movement of goods across the U.S. to make projections about the economy -- wasdown a hair, also on weakness in back-to-school.
What's more, traditionally boldventure capitalists are growing fretful, too, the Silicon Valley Venture Capitalist Confidence Index shows. And six in ten companies wishing to pursueinitial public offeringsthis week have canceled their plans.
To sum up, this boat's bobbing on choppy seas, not sailing ahead. What can you do while we wait for tailwinds to pick up? Here are three ideas:
- Don't panic.The stock market has been having dramatic mood swings lately. And while many money managers are calling for continued volatility, knee-jerk reactions have rarely worked out well for investors and entrepreneurs. Instead, it's best to stay the course in your own retirement portfolios and renew your business focus, too. After all, this is could simply be a case of temporary insanity, and the markets will soon calm down.
Related:How to Stop Stress in 60 Seconds or Less - Use it in your marketing.If you were planning a sale or a nightly dinner special, maybe you could come up with a clever name: Stock Market Jumble Sale or Debt Debacle Deal.
Related:Why Experimental Marketing May Be For You - Don't watch.Turn off the TV and focus on your business. Concentrate on the things you can control.
Related:Shift Your Mindset, Save Your Business
Is the latest downturn here to stay, or will the economy improve soon?Leave a comment and give us your take.
