Seize the Volatility

In sports or music or any other kind of performance, no amount of preparation can take the place of good execution. The same is true in business. After all, why are top managers called executives? It’s because they execute – even when it’s difficult. There’s a lot of uncertainty in today’s business markets, but the most successful leaders are those who aren’t deterred, confidently making decisions even during challenging times. Read on for suggestions to thrive in today’s business climate.

Power of decisiveness

During these uncertain times, some business owners allow themselves to be held back by what they don’t know. How will tariffs affect my business? When will interest rates drop? Some make the mistake of doing nothing, just treading water until things change.

And the truth is, there is no fixed date for when the impacts of current trade negotiations and tariffs will be known. The negotiations going on now are likely to be what the New York Times calls “framework deals,” not finalized documents. As they point out, the 2020 update to the North American Free Trade Agreement (NAFTA) was over 1,000 pages long and took two and a half years to go from conception through ratification in Congress. So, the dealmaking going on today isn’t likely to produce a finished trade agreement anytime in the near future. Therefore, business owners who power through and make decisions today are likely to be ahead of those who wait for the completion of the tariff decisions.

Disruption happens

Today’s ups and downs in the business environment aren’t anything new. Anyone remember the 2008 downturn? The pandemic and its supply chain issues? Disruption is part of life, and business owners who know how to ride it like a wave, rather than sitting back and waiting for it to go away, will be the most successful.

Disruption also brings opportunities. Some business owners, weary of navigating changing government policies, volatile markets, and uncertain interest rates, may decide to exit. Their businesses could become prime acquisition targets, offering decisive buyers a chance to expand their services, geographic reach, or client base.

Interest rates

While some people are idling, waiting for the interest rate light to change, others are making the right on red, then two lefts and a right to make their way around the stoppage and move ahead with their business plans. If a deal has good fundamentals, then whether the Fed drops rates by 25 or 50 basis points ought not be a determinant of whether to go forward with a sound transaction.

Some business owners think interest rates will to return to pre-pandemic levels, but many experts say that’s unlikely, at least in the near future. Several factors, including increased government spending and government debt, put upward pressure on interest rates, even as inflation is declining. In addition, the potential for AI to bring about a surge in productivity across the economy could serve to keep interest rates higher. So, those delaying business decisions in expectation of interest rates falling could be in for a long wait.

Stay committed to growth

One thing is certainly true: it’s never a bad time to be focused on growth. In acquisitions, buyers are on the lookout for firms showing consistent, year-over-year organic growth in their client base and their revenues. Business owners who want to get a high value for their firm should keep their focus on maintaining that growth through the time of sale – like a sprinter running all the way through the tape – rather than dialing back their efforts and easing into retirement.

Along with increasing revenue, it’s important to control costs as well. Consider renegotiating contracts with suppliers based on the new tariff landscape. But don’t cut people unless there is a compelling reason to do so. People are what drive growth in a company. Slashing staff to save money cuts at the roots of a business and undermines the morale of those who remain.

Create an environment in which people can thrive

Instead of cutting staff, find ways to make personnel more productive. Use AI and tech tools to remove the burden of menial administrative tasks and give team members more time to meet with clients and prospects. Those interpersonal relationships are what make growth happen, and they can’t be replaced by AI. They’re also the part of the job staff find most rewarding.

Based on what those relationships reveal, offer clients the personalized services and products they want. In the RIA space, that can mean adding ancillary services such as will and estate planning and tax consultation.