Apple Inc. is closing in on a trillion dollar valuation, the DJIA is trading above 25,000 points, wages are rising and so too is consumer consumption. In other words, the economy is hot and is likely to get hotter.
It’s important for businesses to tap into opportunities while the economy is performing so well. When the times are good, every business needs to act like it. This means investing in themselves. By investing now, businesses can not only tap into short-term profits, but can also improve the fundamental health of their business.
Is now the right time to expand? Almost certainly. The unemployment rate has now dropped to about 4%. This means employees are getting more expensive and choosy. For small businesses, this can present cash challenges. However, it also means that consumers have more money to spend, which is great for companies of all sizes. In fact, wages expanded by a solid .6% in the 4th quarter of 2017. This means companies are investing in their employees, which in turn will boost consumption.
It’s not just consumers that are spending more either. Business investment has also been rising. Business investment rose 8% in January of 2018 compared to a year earlier. Business investment also rose throughout all of 2017, so the 8% jump comes on the back of several consecutive months of growth.
For these reasons, small businesses should look to expand their operations. By doing so, they will be able to draw in more consumer and business spending, which will help them grow their business. Unfortunately, many small businesses lack the resources of major corporations. Small businesses can’t simply sell stocks or take out billion dollar loans to raise capital. Fortunately, a merchant cash advance can help small businesses gain access to the vital resources they need.
Further, businesses who are struggling to attract the right employees shouldn’t give up. Employees are the foundation of every business. If a small business lacks the cash on hand to hire employees now, they should consider a merchant cash advance so they can hire more employees. This should help the business expand, and in the future, this growth will allow them to expand further by reinvesting revenues.
Meanwhile, tax breaks will afford some businesses big and small more resources to invest in themselves. This will increase the competitiveness of markets. Unfortunately, some businesses may not see a major boost from the tax cuts. Any business in need of funding should consider financing, such as a business cash advance, to obtain needed monies. If not, money-tight businesses will run the risk of falling further behind their more well-funded competitors
Yes, the next recession is out there, somewhere. Given how strong nearly every economic indicator is, a downturn in the short-term is unlikely. This means businesses should focus on expanding as the economy does. By doing so, they’ll be in a better position when the next recession hits. Unfortunately, recessions are a fact of the business cycle. Fortunately, smart planning can go a long way towards mitigating the effects.