Chartstravaganza - charts for small businesses
Stepping back from our usual "small business strategies" to look at some macro trends and charts.
Below are 3 groups of charts plus what they mean for small business... Enjoy!
Consumer Health
Retail sales, personal income levels, and personal savings rates.
Wage growth and personal savings rate
Retail sales - online, department stores, big box
>> What it means: Consumer health went parabolic during the pandemic. Government programs (stimulus, unemployment, PPP, etc. etc.) were a big shot of economic adrenaline. Retail sales, especially online, exploded higher in the pandemic and are still growing.
Should we worry that retail sales are at risk now that COVID-era consumer benefits have lapsed? It hasn't happened yet but it's worth monitoring very closely!
Access to money (flows)
Loan growth and money supply.
Business loan growth & money supply growth
>> What it means: Banks are tightening post-COVID and federal money is slowing. Growth rates are negative for both commercial loans and money supply.
That means it's harder for the typical main street business to get funding. With (most) bank failures behind us and the Fed loosening up, we should see activity pick up. Access to money should improve throughout 2024-2025.
Cost of money
Inflation and interest rates.
Inflation rates (current & 3/5/10yr median)
>> What it means: For businesses, inflation means costs are going up. Not every company can raise prices but if you can, you should. Inflation has cooled a bit (well below 3-year median) but is still running way above target (2%).
Interest rates are at multi-decade highs and will probably stay elevated. Tack this onto your higher costs from inflation and suddenly doing business becomes quite a bit more expensive.
Homework
This week's assignment -- phone a friend.
If you know a business owner or leader that's really struggling and could use help in their company; please forward this email to them!
Profit Mastery isn't exclusive to those already in a cozy profit situation. We want to help struggling business owners turn the corner. We'll be giving away seats to our next virtual program to those in need.
When: Starting Wed March 14th (details here) and runs 6 weeks
Where: Zoom links to be provided (replays available)
Price: $999 per participant (group discounts available)
How to register: Use the button below to sign up!
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Colin King, CPA, CFA
CEO, Profit Mastery
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