Friday, July 10, 2009

Ups and Downs

We are all very aware that our current economic condition is not as positive as we would like. It seems that no matter how hard we try or what we do our hands are tied. Unemployment is up, prices are up, and investments are down. Thinking about this situation led me to investigate the state of our economy in the last 100 years to see if I could predict how long this would last.

Most experts agree that our financial system is cyclical; there have always been ups and downs. When we are down, like today, we can’t seem to remember the good times. When we are up we tend to believe that there is no down.

Look at this partial list from A History of American Agriculture 1776-1990. It exemplifies just what the experts have concluded. From the > on the list you can see that we have actually spent more time up than down, and we will be there again soon.

> 1909-18 Prosperity and war boom
1920-21 Sharp postwar recession
> 1922-29 Speculative boom
1929-1939 Great Depression
> 1939-45 Wartime recovery
> 1946-49 Postwar boom
> 1950-56 Korean war and postwar readjustment
1957-58 Recession
> 1958-70 Extended business expansion
1970-80 Inflation rates increased, while economic growth rates declined
1981-82 Recession
> 1983-88 Business expansion
1989-1991 Recession
> 1992-2000 Greatest economic expansion ever

The real lesson that we should learn from these patterns is fully ascribed in the Boy Scout motto—“Be Prepared”. If we planned and saved during the good times; we would be a lot more comfortable in the down ones. Living from paycheck to paycheck in the good times makes no sense. Any financial advisor will tell you that you should have an emergency fund of several month’s expenses for times like these. Even in lean times some savings activity should continue. It may not be easy, and it may not be very much money, but it is a good lesson in discipline that will serve you well, whatever the state of the economy.

Monday, July 6, 2009

Have you noticed the ratio?

Most of us were born with two ears and one mouth. There is a special significance to this ratio. We should be leaning more heavily on listening than talking. While you are doing the talking you can’t possibly hear what the other person (parent, child, client, or friend) has to say.

A lot of us seem to subscribe to the misconception that only way to get our point across is to keep talking ( sometimes with increasing volume) until we wear the listener down. However, if you didn’t listen to your customer describe the widget he wanted and the fact that it had to be blue, you would have egg on your face when you delivered a red one. You would stand a good chance of losing the sale, future transactions and all the referrals that may come along with it.

You should consider retuning your communication tools so you can really comprehend what your client has in mind and how you can help solve their problem. Ask a few open-ended questions to determine their exact needs. Restate the challenge to be sure you are all on the same page. After this fact-finding and attentive listening you should have no trouble offering the right solution.

By keeping in mind the ratio between ears and eyes: listening and talking, you will find that all your communications will be more rewarding and you will be easily able to build on your successes.