I attended my chamber's Fall Forum event at a local theater with four business leaders sharing on the state of the economy and business. For the purposes of this podcast, I'll keep the panelists nameless, but will share their backgrounds. Their backgrounds were the following: an analyst from the FED, a chief lending officer from a local bank, a machine shop owner, and the owner of a construction engineering company. I listened to each of the men talk on the state of the economy and business and the lessons they've learned and implemented. A theme emerged in my mind.  The construction engineer noticed that customers in residential real estate were more interested in energy efficient homes than ever as they wanted less expenses to operate the home. In past years, people didn't care about this as much. The machine shop owner struggled to get good tradesman to work for him. He was reluctant to take on new work. Therefore, instead of growing the bottom line, he focused on taking care of what he already had. He focused on his existing team and doing the work he could handle. He gave increased compensation and benefits and intangibles. He focused on relationships with his team and his vendors. I thought this was incredible as his culture is now booming and morale is way up and it's more desirable to work for him than ever before. All of this happened because he couldn't grow. The loan officer shared the point of view from his customers that he lends to. He notices that businesses are doing more tightening of the budget and watching their expense lines. They are watching their cash flows also to make sure they can handle what's coming next with increasing interest rates. He mentioned one customer that normally would do a single projection for the next 12-24 months. That same business owner is doing 3-5 projections at any point similar to a meteorologist tracking a hurricane on weather.com.  

I really love how businesses are tightening up and getting efficient in their finances. I love how businesses are placing high value on building relationships and culture in their teams. Obviously this was triggered by the tightening of the economy and the inflation and rising prices. As I pondered these answers, I asked myself the questions. Will the lender observe his customers still doing multiple projections and managing cash flows when the economy is booming? Will the machine shop abandon the culture growth when hiring is easy again? Will the construction engineer be doing energy-efficient homes when energy is abundant again? I stood up and asked this question when I had the opportunity to the end. The answers were awesome, especially from the loan officer. He shared an example about his grandparents in the Great Depression. "Those that experienced the Great depression continued to operate as if they were in the Great Depression, even when things got booming again. Those that went through it, don't forget it. That mindset continued. But then the next generation who didn't experience the Great Depression had no idea. And therefore took no precautions when things were good. And these are the ones that got wiped out when it got bad." Our chamber director had a great answer. "A week economy makes businesses stronger and a strong economy can make businesses weaker." The loan officer continued by saying, "the businesses that have gone through these last 2-3 years will not forget and will continue to operate as they've been . They will stay efficient even as they grow in a better economy." He gave a warning. "It's the next generation that concerns me. These are the businesses that never experienced the pandemic like we have."

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