The final part of our business plan must be a contingency plan. How do you hold your performance level when the general economic conditions deteriorate even more? Today, we supposedly see “green shoots” in the business world. However, personal spending, which is the major driver of the U.S. economy, is still lagging badly. Unless you have great expectations from sales to foreign markets, next year might not be any better than this one.
As I write this, the proposed government medical plan has not yet passed Congress. If it passes in anything like its current form, it will impact your costs in the coming years. How about the cap-and-trade bill? Capping CO2 emissions is definitely going to impact the entire industrial heating community if that passes. Where is your company going to be in that event? How will it impact your customers? Your product offerings?
Actually, I believe that all this uncertainty over these major cost initiatives by Congress is even further delaying business investment and the long-awaited recovery. Not to mention the tremendous debt load that the U.S. is now being saddled with. What is the impact this will have on the dollar? How will that impact your business?
Does all this mean that inflation will begin to heat up? Many believe that we are headed for a large bout of inflation. Maybe the fed will raise interest rates to cut off inflation, which will likely send our economy into a double-dip recession. How do you factor that into your planning?
These are certainly difficult times to be trying to generate a business plan for the next two or three years. However, we must do it. It is just as important that the concepts we use as the basis for the actual budgets be clearly defined so that adjustments can be made when we know how those concepts and judgments fair as the year unfolds. That is when your contingency planning will pay dividends.
That completes our discussions on planning.