I started the discussion in our Facebook group about what our top industries were, that we serve as accountants and bookkeepers:
Now I’m going to produce a series on how to go about researching these industries.
Analyze and understand them, so that we can begin to understand what is happening on Wall Street, and how that might impact us here on Main Street.
First some high level market analysis, just published today
US Dollar Decline will continue, 4-5% for the next two months.
The U.S. currency weakened versus most of it major peers, pushing its drop this year beyond 4 percent. The dollar fell the most against higher-yielding currencies including South Africa’s rand and the Mexican peso.
You have to look beyond Your customer, and look at your customer’s customers. Who are they? How will their spending habits be impacted by weaker consumer confidence and a weaker dollar.
When the dollar doesn’t go as far, consumers prioritize more.
- Is your service a priority? Most small business owners will cut back on accounting and bookkeeping costs when things get tight.
- What will your customer’s customers do?
- Who are they? Businesses or Individuals?
- If business, what industry?
- If consumer, what is the need for your customer’s product based on? Is it a necessity, or is it something they’ll likely cut back on while the dollar, and their confidence is weak?
- If you serve restaurants – that is definitely affected in a weak economy.
- What are some publicly traded restaurants?
- Researching this will give you an indication of what you can expect for your clients.
Of course your restaurant clients can read the same stuff, but they are likely too busy running their restaurant.
If your goal is to become the strategic advisor, then you will want to get informed about this kind of stuff.
A 2 second Google search for publicly traded restaurants got me this:
Let’s check in on BJ’s Restaurants, Inc.:
BJ’s stock has not done well the past couple of months:
Looks like the downturn was predicted in July here:
There’s a recession coming, and it could be the ‘worst ever’ for restaurant stocks
There is a good chance that your restaurant clients are experiencing what these major restaurant chains are experiencing on a smaller scale.
How would you advise your client to handle business in the wake of this downturn for their industry?
One of the experiences I had, working as a stockborker years ago taught me something very interesting.The thinking I learned was counter intuitive.
Most of us spend more when things are going well. Money starts rolling in, and we think, “oh let’s celebrate!”
One of my sales managers taught us that when we make money, we save it. We specifically do not spend. Then we have a fund, that we use in the down times.
This is a personal financial strategy, NOT a business strategy.
For business we only do the first part. We save when things are good.
Who are your restaurant customers, customers?
They are you and me. They are consumers. They are the very people who’s “Comfort” has diminished to the lowest level since last December (see above).
What do you think this means for your restaurant clients?
Let’s be clear, and specific. A high end restaurant will not be affected by this.
Nor will your sports bars with die hard types who show up come hell or high water.
Where does your restaurant fall in the consumer mix?
Who are your customers?
Will they continue patronizing your restaurant when times get tough?
Now look at your restaurant client’s numbers.
You know those financial statements that you’ve spent so much time compiling and cleaning up the informationNow you should be able to take this concept – what I’ve laid out above for the restaurant industry, and plugin any industry, but I will do a series nonetheless on various industries, using this same idea.