Change is coming. Be proactive, not reactive.

We’ve been talking about a possible recession for 8-10 months and now with rising interest rates, slowing job growth, record levels of inflation and fuel prices, and housing prices remaining high it seems inevitable. We are already seeing a dramatic pull back in venture capital funding, and consumers are pulling back on overall spending. However, this won’t be a repeat of the Great Recession. Why? This recession is being driven by the result of the dramatic economic stimuli of the recession which drove up durable good demand and the waterfall effect resulting from that. Labor markets are still robust, and deposits are strong. In fact, in stark contrast to the Great Recession, banks and credit unions are still eager to lend. All of that being said, we know that statistics alone don’t drive behavior. We are still far away from the bottom of the equities markets and the continued decline coupled with rising costs might drive consumer and corporate fear. This sentiment can lead to spiraling negative behavior which will exacerbate the effects of the recession. The most important thing that a business can do is to set a plan in advance, and not be reactive. Reactivity in a time of fear, negativity or crisis leads to bad decision making. Being proactive and developing plans based on intelligent and thoughtful evaluation of potential market shifts is the best course of action. Accel Advisors’ P-STEP program helps business leaders plan for the prospective impacts using a programmatic approach sure to help businesses sidestep landmines in the future.