Certainly if you keep telling yourself that you can't achieve what you want, chances are you won't. But there's a difference between being confident, or even faking enough confidence that the real thing comes along, and assuming that exterior conditions are rosy. They may not be. You need to consider real information when making decisions. And sometimes the evidence suggests that you need to be wary because the environment may be about to turn ugly.
Balancing growth and sustainability
From what I've seen over the years, many entrepreneurs are biased toward being positive and they think that growth is everything. They want to see their businesses get bigger faster. However, growth may become a bad idea if extending yourself too much puts you at risk for a downturn.
In fact, you may see signs in your business now that all is not what it seems to be. Those are important signs to watch. Over time, you might develop an intuition about when conditions are about to change for the worse. When you get that feeling, it's time to consider how to keep the company together.
I'm getting that feeling now as I see some big clients shutting down entire promotional activities, others stretching out programs, and still others telling themselves that they can do it all in house, even though they're already thinly stretched.
To survive in business over the long haul you need a different attitude toward the world around you than confidently chasing after growth. It's one that the late Andy Grove mastered when running Intel in its heyday. He knew he had to make decisions but didn't confuse that with having a clear picture. The world doesn't wait. You make decisions and then correct then if and when you're wrong.
At the same time, Grove was pragmatically paranoid. He didn't take anything for granted and knew things could go wrong, particularly in the surrounding world.
Right now there is information that should make you think twice about the general economy. Not only has company hiring slowed according to the May government report on jobs -- that happens periodically -- but the number of jobs added in March and April have been revised downward. Even more importantly, there's been a spike in people dropping out of the labor force. We're seeing an economy that isn't strong enough to bring hope and solutions to everyone over the long haul.
The jobs report will affect the Fed's decision on interest rates. Low rates are welcome by many, but the continued dependence on stimulation should also be a concern. It's like continually having to jump start your car. Eventually you should ask why the car won't start normally.
Supporting the notion that the economy is struggling is GDP reports from the U.S. Bureau of Economic Analysis. Growth in the first quarter of 2016 was at an annualized rate of 0.8%. That's almost flat lining. Orders for heavy trucks have been falling at double-digit rates for months. Trucking companies aren't handling as much freight volume -- a secondary indicator of economic activity.
These are all data points that suggest inclement economic weather is on its way. Entrepreneurs should consider what steps they should take in terms of socking away cash, reducing costs, and putting more emphasis on sustainability. Don't totally ignore the possibility of growth. If you can bring in additional business without driving up fixed costs that leave you at a disadvantage in a sudden downturn, by all means do it. Just be prudent.