Transcript Episode #139 Three Trends Likely to Impact Business Owners
Intro: Welcome to the Arised2Live podcast, episode number 139. Three trends that will likely impact business owners and their company. The three trends covered are computer security, a K shape economic recovery, and a surprising personal leadership trend. Arise2Live’s purpose is to bring clarity and perspective so you can have freedom in both your business and family life. Let’s get started with today’s episode.
Scott: Hello and welcome to the Arise2Live podcast. Podcast for business owners looking to increase profits and freedom from the business. We do this by presenting know-how, personal leadership all the while still maintaining a healthy relationship between family and business.
I’m your host, Scott Weaver and regarding this episode, my online coach will have something to say to me by not producing evergreen content. But there are some trends that’s been developing over the last couple of months, maybe undercurrents, and these things have been going on in the summer of 2021. Definitely two of these trends I’ve already taken action on and the experience and I’m starting to plan for the third. Also in this episode, I’m hoping I’m not too technical, but I think knowing a bit of the “why” will help you understand the trends and make good choices for your company. The three trends are increasing computer security, that is, businesses need to protect themselves from the robbers and bad guys, and the second one is: it is still a K shaped economic recovery in the United States, and that impacts the government and corporate decisions, your customers, and likely you. And if you know about it, you can maybe control things a little bit. The third one is a surprise for me. It’s an emerging personal leadership trend that is calling for business owners to slow down.
Think more and enjoy life more. Been showing up in many places around the country. So what to do about these trends? Trends are things that are coming or may be rising up, but they’re not here yet. And if nothing is changed, often these trends will be on our laps before we know it.
And trends can be warnings or opportunity or both. Take, for example, the need to increase computer security, protecting yourself as the main point. But for some, there is opportunity to sell security software and know-how or maybe in improving your customer’s privacy becomes a competitive advantage over your competitors.
There’s a lot of possibilities and dangers with trends. But from my purposes, there’s a deeper reason about watching the trends, we business owners have a lot of responsibility and many people depend on us. For example, our employees livelihood.
If we can be a bit far sighted and prepare for upcoming events and trends, our business will do better or more likely to prosper. As Wayne Gretzky famously said, “I skate where the puck is going to be, not where it has been” and I think this holds some truth for us business owners. Now, I can’t directly speak into your particular situation, but please take these trends. Think about them and maybe use them to prepare for your future, for your company, for yourself.
I’m not talking like major drastic changes, but maybe developing a Plan Bs or like tweaking your strategy a little bit. That’s what trends can do if you know about them ahead of time. The first trend is computer security and please let me be straightforward. It is open season on small business computers. If you have a business, you are a target for a lot of bad guys. I have been targeted in emails, bogus social media accounts, and people looking to connect, and my website is attacked every day.
Two years ago, professionals hacked into my site. I didn’t even know it for a couple of weeks, and they used my account for nefarious things before I figured it out. And I just deleted everything and started over. But now I have effective safeguards in place for the most part.
I still have problems against the nation states that are hacking everybody in America. But at least I make it more difficult for them. The hot thing for this year is ransomware. Ransomware is where the bad guys get access to your computer files, whether on the cloud or on your computers, in your business or at home.
It’s always, almost always done through the Internet. And then they get into your computer. They encrypt them and demand money, usually in Bitcoin, for the decryption key and if you don’t pay, they sell the information to whoever can use it to take advantage of you in which they may even do, even if you pay.
Schools, universities, gas-pipeline companies, these have all paid to get their files unencrypted and back. And I have to be up front, if you get attacked and they get through. There are no easy options. You’re trapped between a rock and a hard spot if you can’t recover from a full backup.
And even if you do have a full backup, it still is time consuming. The point is, is have a full backup of your computers and to keep sensitive information buried deep within your company and hard to access.
There isn’t enough time to go through all about computer security, and it’s not even what this podcast is about. So seek out experts, read blogs online, come up to speed so you can do a better job protecting your company and yourself.
Unfortunately, the trends, this is going to get worse and you will be attacked online. There’s just no place to hide. Well, unless you want to stop all marketing and sales and yeah, for business, that’s not going to happen.
So please get your defenses up. Now, here’s a couple general ideas that sometimes get overlooked and I have found effective. And the first one is go low tech, as in basic stuff they did 30 years ago or 40 years ago.
So buy a couple of external hard disk and do a complete local offline backup. Backing up as a disk image, that’s the buzzword. So if you get ransomware on your computer, you don’t have to pay. You just reformat the hard disk or throw them away and restore the image back the way it was.
Of course, you have regular backups. That’s the approach I took when my website got hacked. I just deleted everything and then uploaded it the backup website. Another low tech approach is don’t put data on your Web site account. Robbers can’t steal it if it’s not there.
Don’t connect to the Internet, key computers if you can. If there’s no doorway to that computer, outsiders can’t hack in. And another trick that a lot of people are starting to do is to install your own router that is used in tandem with the Internet provider, their router.
So a lot of times Internet providers make you rent their router, but you don’t know what they’re doing. You don’t know how safe it is. So people buy another personal router and so getting to the Internet has to go through two routers. And this is an approach I do.
Another obvious way to protect yourself is to get the security software and use it. There’s many, many solutions out there. Go research it, asks people. I regularly use a VMP to encrypt my Internet connection.
I use wordfence plugin on my WordPress site. And this is pretty technical, but I actually modify my own HD access file for my Web site servers. And the last simple things that you can do is to have good practices by not having stale accounts. You need to delete them. And this is easy to forget. So let’s say you hire a Web site developer and they have access to your Web page, and then they finish their work and go off. But you forget to disable their account there.
That is one way a lot of hackers get in. And so you whatever you have, content providers, VAs, developers, just make sure that those accounts don’t go stale and unprotected. The point in this trend is there’s going to be robbers. They know we have to use the road. So be creative, do things to protect yourself.
Switching gears here, there is some undercurrents going on in the economic arena, and I will say even the experts really don’t know what is going to happen. But with that said, it doesn’t mean we can just sweep it under the rug or pretend things are not going on. Things are going on. So I do think that this trend and the K shaped economy, which I’ll get into in a few minutes, will impact our situation and it’s kind of complicated and a little bit technical, but I’m just going to shine a flashlight on it. I still think there is a K shaped economic recovery.
So what is a K shape recovery? So imagine the letter K, the capital letter K. Yeah, that K in the English alphabet. It has one angled line going up and another angle line going down. This image or metaphor for an uneven economic recovery from the Covid pandemic and lockdowns, this unequalness is where some parts of the country or certain industries, they are recovering and doing very well.
Other parts are not. In fact, they may be actually doing worse. For example, there is a blog posting on the website Investopedia that has an image on a graph of industries performing about the same before the economic turn down and you can see these industries, you know, starting to fall off during the lockdowns. However, the recovery has a few industries recovering. They’re looking great and a few that are not looking at all. And it, it looks like a K.
And particularly in this blog post, technology and retail industries are recovering quite nicely. However, the travel and entertainment are not doing so, so well, and they definitely have not recovered anywhere close to preCovid levels.
So in one way, it makes sense. Customers that serve crowds were hurt the most in the Covid pandemic. So this trend, this K shaped economic recovery trend, people were spotting this almost a year ago. But last spring, the economic wonks were saying that by the end of summer, this K shape economy will turn into a normal recovery. That is where everybody is going up and they were expecting the complete lifting of Covid restrictions.
So another way to say that is in a normal recovery, the boat is lifting everybody up. However, with this Delta variant that is spreading through the country right now. Well, I think the K shape recovery will continue. And frankly, that is not a good thing. Having one part of the economy, doing great and the other parts falling behind. Well, that’s not a good thing. Serious problems like economic and social and political fall out of it.
So this leads into the next thing, like what can government do about it? And that leads into inflation and government spending. Most government solutions are big hammers that just, just cover everything, hit everything. So in a K shaped recovery that we’ve been seeing, how do you help those at the bottom of the K? How do you help those people and industries do better, but not helping the ones at the top who don’t need help? I don’t know. And frankly, I’m not sure how many people actually know. This is one of the reasons why we see such broad stimulus packages, you know, actually cash payouts to people, extra unemployment benefits and the infrastructure packages that are going out. These stimulus packages, poor extra money and dollars into the economy. But most of the time when they do this, it’s in a top down fashion. That is the banks and investment firms get it first, because the government really doesn’t have a good way to reach the little people.
Critics say that is helping people at the top of the K and it does. Now, don’t get me wrong, we found out in 1929 what happens if nothing is done? President Hoover, well, he didn’t do anything at the start of the Great Depression, and it got worse, much worse.
So something must be done. So for better or worse, our government packages are having some impacts on the people in the lower part of the K, the ones who are being left behind. There is action underway and more to come.
So action is better than no action. As a business owner, we need to ride these waves. We can’t control the economy any more than we can control the weather. It is just the way it is. In this K
shape recovery, quite frankly, generating some inflation. Inflation is here. Inflation means prices you pay for things are going up because your costs are going up. You’re going to have to raise prices in your business and when you do that, customers pay more.
And if everybody’s doing it, they need to demand more money, get paid more from their employees, and which raises wages because your employees are also paying higher expenses, and they want to get raises to cover that.
And so it becomes an upward cycle. And in America and in many places of the world, the supply chain problems is complicating the situation even more and increasing costs. But one thing interesting about inflation, as long as customers have the money to pay for rising prices, things are OK.
That is how countries in hyperinflation survive. They get daily raises. And as a business owner, you’re giving daily raises to your employees. However, traditionally, the American economy does not handle high inflation well. One of the reasons that America doesn’t do well with inflation is culturally. We don’t give wage raises very often.
It’s mostly like once a year, maybe twice a year if you work for a great company. So if prices go up, customers spend less, spending less hurts business. Then there’s layoffs and which means there’s less customer buying and this downward economic cycle starts.
And we saw this in the 1970s. Today, in the last couple of months, inflation has been going around four to five percent, maybe six percent, depending on who’s counting. And there’s expectation that housing and health care costs are going to be greater than 10 percent over the next year.
The problem is we’ve been living and most of us expect an inflation rate around two and a half percent. So the prices are increasing twice to four x the usual rate, and that can be very demoralizing. The government stimulus money is a factor in this inflation, because part of the stimulus is going to the top people in the K shaped recovery. People that really don’t need to be helped. But practical things, the government cannot help not to do this. So it ends up that the upper K people, those companies have extra money to buy things at full prices.
So in theory, this extra buying stirs up demand for business, and that means business will hire people from the bottom of the K and help them out. There is also part of the stimulus that’s going to the bottom K. The ones who are lagging behind in the recovery. This has been usually direct financial relief to keep people in their homes, helping cover rent, or a direct payment, like for the child care credits. And they can buy things.
This spending actually helps everybody. When this is done, the economic engine continues to run. In theory, we’ll get out of the K shape recovery and into a normal recovery. Again, don’t get me wrong. Action needs to be taken and action has been taken and will be taken by the big leaders.
But for most business owners, we, we’re along for the ride and if we know what’s going on, if we know that they’re taking action, this ride can actually help us. One point that I want to make about inflation is, I think it will remain high for the rest of the year.
I hope I’m wrong, but I think the Covid Delta variant is a monkey wrench in the stimulus package. So here are a couple of things that you can do while inflation is kind of high. First one is prepare your business for increasing purchasing costs and wage expenses.
You may have to raise prices and still somehow manage to keep customers. And behind the scenes, kind of when you start uncovering things, many things are linked to inflation in our country. Social Security payments are linked to inflation and in many states, minimum wage is linked to inflation. Which means wages could be automatically going up. If you know that’s coming, you can plan for it. So financially, work on your profit loops using the business expenses, let’s say, increasing five to 10 percent.
Are you still profitable? Can you improve your business process to reduce cost? How much can you raise prices? Try to figure out those things ahead of time the best you can. There’s no way that you can be 100 percent certain. But being 50 percent certain is better than zero percent.
The second thing with this inflation and government policy is that increased government spending usually means increased taxes. So right now, our government has a spend and tax mindset. So we will definitely be seeing higher taxes. We just have to deal with it. For you Financial gurus and people out there, this gets into modern monetary theory or MMT. But I’m not going to talk about it. But that is a factor. So if we have runaway inflation, the Federal Reserve, which is basically a bank of the land, Bank of America, the government, they will raise the prime interest rates to the big boys, the big financial banks and financial houses. That’s what they do to control runaway inflation. It is putting a brake on the economy and often when this happens, it causes a recession.
For example, this is the approach that Ronald Reagan did in 1981 to stop the last high inflation problem in America. For a couple of years it was painful. But after that, it launched an era of prosperity that, depending on who you talk to, lasted 10, 15, maybe even 20 years. If this does go this path, where they have to quickly raise prime rates. In a recession, cash is king. So save up your opportunities.
So the third trend is about personal leadership. I’m not sure how to say this, because this is a new trend on my radar. It’s a trend that I’m hearing from business leaders and owners. They’re saying that they should be slowing down, thinking more, taking care of themselves more, and this slow down trend is likely, actually, some people have documented leading to higher productivity, meaning spending less energy, less time, and getting the same or more results, which is an interesting concept. The thought is, basically we have been running our business and life so frantic that taking a breather to think through things actually helps us to work smarter and with a better mental and spiritual wellbeing. We make better decisions in our business.
It’s more about running your race, whatever race you’re in, because there’s many different companies out there. Let’s say, for example, running a marathon at a fast and relaxed pace to reach the finish line, not a fast and frantic pace and burn out halfway.
And to be honest, I’m still thinking about this slow down trend. Part of me consider it a desire of not going back to the pre-Covid pace of just go, go, go, go, and more, more, more, more.
But I think it’s more than that. I have seen this slow the pace down trend in my mastermind group. I’ve seen at the conference I just went to, I seen a blog post both on the East Coast and West Coast.
I see it coming out of Europe. I hear things about the four day week. So there’s a trend that’s going through. Here are a few things that I’ve heard about this trend of slowing down. Well, the first one is slowing down. But I’ve already talked about that. I’ve heard about delegate more, offload the busy work and things you don’t like doing and work more in your genius area. Often this requires hiring extra staff or a VA to help you out.
Another one is to focus and only do the most important things in your vision for your business and family. Don’t get distracted. Focus. That’s what a lot of people have been saying. Finally, do I dare say this? Add a rule of life into your lifestyle. That is rule, not rules and it comes from a very old thought or saying that in times of chaos in society or when things are just going really fast, having a structured routine that includes mental, spiritual and relationship downtime. Well, this creates an inner stability so that you can better accomplish your tasks and your goals that you need to do.
So in our case, we need to run our companies better. So maybe the thought is, is that if you had a stable routine, a rule of life, we can do that better. So most of us are already using planners and schedule apps and applying an ideal workweek.
So this rule of life is actually more of a step where things are really going. I don’t know. It’s kind of interesting. So for me, I’m still considering. I’m still thinking about this slower pace. I guess I would say that it’s more about being fruitful and less about just focusing on productivity or just being busy. So anyway, what do you think about this trend? Please let me know.
In closing, the three major trends that were covered in this episode are increasing your computer security, it’s still a K shaped economic recovery in the United States, and there is an emerging personal leadership slow down or slow the pace trend.
Oh, yeah, before I forget, the Covid vaccine is not the messiah that was promised. It’s not going to get rid of Covid, especially as we’re seeing the breakthroughs in the Delta variant. So have a plan if your business goes into lockdown again.
I do want to say something about the K shaped recovery and what business owners can do. And one has to have empathy and maybe compassion for the people who are not keeping up. And I do think this is a responsibility or obligation to the community we live in. As business owners, we are leaders. We know how to manage. We have to manage money. We have to manage employees. Those skills can be very valuable to other people.
If you’re in an area where you’re doing well, but your community is in the lower part of that K, volunteer some time because just your presence and your skills can make a lot of difference to a lot of people and you don’t have to do a whole lot because you know how to do this. Having a K shaped recovery is, in the long term, not a good thing and if we can just do a little thing, even if it’s, you know, putting one brick in the wall and that’s all we can do, that’s great.
In closing here, so please take time to think about these three trends. How they might impact your situation, your company, and consider options that you can take and create some plan B. You know, hopefully some of these plan B’s you never have to use, but if you do, it’s really good to have those in your back pocket. Be far sighted to better your company in the future. Have empathy for the people who are falling behind in your community. Try to help out if you can, because by paying attention to the trends, you can Arise2Live.
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Scott uses a proprietary four step system to get you the results you need. Start running a thriving business, not a self created job. Schedule a call today on the Arise2Live.com website.