For June, “12 Seasons” addresses the question:  Is now the time to start hiring again, to start acquiring, to start serious expansion?  The answer, as you might surmise, is:  it really depends!

The economy is expanding in general versus last year, but it’s still way below 2007-2008 levels; certain sectors are growing nicely, others still dropping, and many are still stagnant.  Prices of many commodities and other products/services are skyrocketing, while housing continues downward significantly again.  Geographically, things are sporadic as well.  While the outlook ahead is “up” — it’s very mixed and probably very challenging for individual businesses.  Finally, while loosening slightly, bank lending is still very slow to spotty to non-existent.  Rising costs portend rising interest rates which in turn point to banks having to lend more to maintain their earnings levels.  But the inflation-push, interest-rate-growth, bank-lending equation could take quite some time and be highly selective by industry.

So, expansion for your business depends on what your specific industry looks like now and over the next two-three years, what your locale looks like, what your raw materials (including labor) look like, plus what happens in November 2012.  A real mixed bag!

We do see acquisitions picking up, selective hiring improving, and silo-ed growth happening.  Indeed, it is time to expand for some businesses, albeit carefully!  This means considerably more due diligence and backup cash/credit for acquisitions, for organic expansion, and for any other form of growth you might contemplate.  Safety margin and caution are the keywords.

Some tools for assessing your outlook are at www.ceotools.com in the form of the Valuation Tool, Interview and Retention Tools, plus 5-Charts and Forecaster Tools.  Other tools are at www.usdebtclock.org and www.itreconomics.com for assessing the emerging economic scenario.

If this helps your decision on whether and when to expand and how, we’ve succeeded here.  We welcome feedback on improving these tools and tips.

Very best regards,
Kraig Kramers

Here’s the timeless article by WalkingBear on how to collect and manage your cashflow better.  Somehow it “disappeared” from earlier blog postings here, so here it is again by popular demand!  You can click through to WalkingBear’s website to get more tips and ideas (his URL at the bottom of the article).  Click it up now at Timely Cashflow Tips – see it now!  Best as always, Kraig

Appropriate of April, 12-Seasons probably should be “spring showers to bring May flowers” and was supposed to be our month for a good, solid re-look at economic conditions for us who run businesses.  But that’s been made nearly impossible since our stalled-out Government cannot decide what to do about the deficit…contemplated cuts are far too small, and they haven’t even begun to address the real problems of medicare, medicaid, social security, and jobless subsidies (including food stamps)…or long term job-creation.  These challenges currently total about $127 trillion of actual debt (that’s not a typo).  Fiddling while Rome burns sort of comes to mind!

We only mention all that because taken in total, it stalls our economy.  Business can’t possibly see much of the future when Government can’t decide, so business doesn’t invest or strike out for a better tomorrow while worried about survivng the present.  And then even when Government does decide, it opts for momentary, temporary, delayed, and tentative stability in exchange for long-term growth and prosperity.

This in turn makes a solid forecast very hard to come by, other than to say the remainder of 2011 looks rocky from a credit, cash, and growth standpoint for most industries and most businesses, with some opportunistic options for a few businesses and locales.

With that in mind, we should experience a continued slow, sporadic, and siloed recovery over last year (not anywhere near back to 2007-2008 levels) but still creating opportunity for some.  As business leaders we must choose our inidvidual business paths accordingly, cautiously, and with frequent “re-looks” at the near-term future.  For me this implies planning only about 3-months out at a time, reviewing and renewing planned action steps perhaps even every month.  And, keeping our audiences informed (employees, suppliers and customers) is critical to their buy-in and continued support.

Hope this helps in planning the rest of this year.  Let us know how to improve these ideas when you have a chance.

Very best regards,  Kraig

We’ve been getting a LOT of interest in acquisitions and exits.  The merger/acquisition market slowed dramatically during the protracted recessionary period of the past three years, which in turn has caused substantial pent-up demand!  Despite that, my advice has been to really consider your cash and credit situation before embarking on a buy strategy due to probable more years of slow credit availability; similarly, watch for low multiples for exits in these continuing tough times.

With those caveats said, I’ve been asked to talk “Acquire/Exit” a lot recently and I also became a Director of a boutique investment banking firm (Bulkley Capital) that takes a unique, personal, customized and very different approach with clients nationwide.  They advise you on strategy, then tailor their approach to your needs, and achieve your M&A event while assuring the best process along the way. 

We’re including a piece from Bulkely Capital which highlights the five most Common Seller Mistakes — just click to view/print PDF.  Through my own experience with over 70 deals, I’ve found this kind of quick-read summary to be hugely helpful when considering that most important M&A step.  Have a look…I think you’ll pick up something of value!

Please feel free to contact me or Brad Bulkley directly with any questions or for an  introduction, very personalized service, and of course complete confidentiality.

With best regards,
Kraig Kramers