Opportunities Amid Uncertainty?
2010 May Be the Time to Act on Important Strategic Business Decisions
The 2010 year is a unique time to accomplish important business objectives, be they operating, financial or ownership related. Business owners must carefully consider the current uncertain ties in order to position their companies (and themselves) optimally for the future. In this article, we focus on the current economic, transaction, and tax environments that business owners should factor in their decision-making.
The Economic Environment
The operating environment across many industries continues to be challenging. The overall economy contracted around 2.5% during 2009 as measured by the change in GDP. While the economy appears to have avoided catastrophe (at least to date), and GDP actually increased during the third and fourth quarters of 2009 (5.7% in the fourth based on the most recent data), we continue to see high levels of uncertainty regarding any recovery.
In discussions with business owners and executives across diverse industries, we continue to hear the same two questions:
- Exactly how long will the economy take to normalize?
- What is the "new normal" that we are normalizing to?
For many industries, pre-2009 performance levels will not likely be regained in the short-term. Those management teams that appreciate the threats and opportunities of the current economic environment stand the best chance to position their companies for both short-term and long-term success.