NEO WORLD BIZ ECON SHOW 5: ITS BEEN FUN & CRAZY HOT - WILLIAM EASTMAN

This show and the next is going to cover where we are in the current economic cycle. Being totally unpolitical and just focused on the warning signs like geese heading south, we are entering a period of stagflation (increasing inflation, increasing prices, high unemployment) - any of that sound familiar? 

The prevailing talking heads that comprise government economists want to believe the artificial global recession of the pandemic is a substitute for the naturally occurring contraction. We disagree because there was no real cleansing of the market because of the trillions of dollars placed into the economy didn't fix what contractions fix - bad business descisions brought on the by the previous bubble.

EPISODE 17: LIFE IN THE BUBBLE
At The Top – True Value < Market Price
Supply Exceeds Demand with Excess Inventories and Inflated Price. This is the opposite of absolute bottom, the economic cycle has reached its peak and now the weight of the wave exceeds its ability to maintain momentum. All the signs are there, soaring prices, inflated money, easy credit, expanding inventories, and many new competitors – the wise realize the party is about to be over – the bubble is about to burst. As a business owner it is time to leave the table, cash in your chips, and get ready for heavy seas.

Topics

• How long to stay in the game?

EPISODE 18: WARNING SIGNS OF A BURST?
Euphoria. Good times are here again. Everybody has a short memory of the last time, but you know the bubble has started. If you got in early, now it is time to prepare the company for the downside by taking advantage of the common euphoria by expanding business with your existing accounts with a new product or service.

Topics

• What factors should gain my attention?
• What actions should I initiate?
  • Make Managing Cash Flow #1 Priority before the Crest
    1. Analyze all spending decisions from the expansion and eliminate the nonessentials
    2. Focus on minimizing fixed costs
    3. Get a Line of Credit and don't use it or get it down to zero
    4. Get clean with Accounts Payable and renegotiate terms
    5. Bring all Accounts Receivable under 30 days, factor the accounts, or offer terms to close out delinquent accounts

EPISODE 19: PEERING OVER THE CREST
Distress. The smart are out and already conserving cash. They are cleaning up their credit accounts with their investors, creditors, and suppliers. Everybody else is reacting to what was obvious but they have no plans for surviving the upcoming winter. While they are wondering what to do next, the smart are ensuring seed for the next season is saved because the contraction will end and those ready to act early will benefit the most in the next expansion.

Topics

• Pigs Get Fed, Hogs Get Slaughtered

EPISODE 20: GOING ROBUST
Carrying the feeling of Distress further, it is time stop all high risk activities that has you speeding money or extending credit. Think like a squirrel when the days starting getting shorter and the nights colder, gather up the nuts and find a safe place to secure the horde.

Topics

• Make Managing Cash Flow #1 Priority after the Crest
  1. Review accounts with customers to improve the relationship
  2. ​Lean up the operation - reduce variable costs, reduce your cycle times to design>build>deliver
  3. Pass on cost savings to customers 

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Make sure you leave some thoughts in the comment section below. I am interested in continuing the conversation.