Why A Positive Mental Attitude Matters During Recession

Economic outlookIt seems like everyone is fixated by recession talk. 

Everywhere I look people want to know if we’re in a recession.  Turn on the nightly news or the 24-hour cable news, and you’re treated to one dismal economic statistic after another. 

I’ve been interviewed 3 times in the past week about recession and the outlook. 

Are small businesses being hurt by recession? (“yes, some are being hurt, but not all – it’s situational”)

What should small businesses do during times like these? (“run the numbers before expanding, delay big expenditures, but otherwise business as usual”)

Will the tax stimulus package help? (“rebates will put a little extra cash in our pockets as consumers, but hardly be a blip for most businesses, except maybe retail which will get some benefit of consumers spending those rebates”)

Let me state it again:  I am not worried about recession. Worry about macro-economic issues is a waste of precious mental attention.

Do I think we’re in a recession?  I’m not a trained economist, so maybe I am not the best person to ask that.  But, yes, I tend to agree with billionaire Warren Buffett when he said recently that by common sense standards we are in a recession.

However, that doesn’t mean you should have a negative outlook.  

History is a wonderful thing, and it tells us one very important fact:  recessions are temporary conditions.  We’ve never had a recession that hasn’t been temporary.  At some point the economy will start growing faster again.  Meanwhile, consumers continue to spend and businesses continue to do business, even during recessions.

I would never suggest that you ignore negative economic news in pollyanish oblivion — that would be foolish.  Just take it with copious grains of salt.  Most of the news over-emphasizes the negative, because that’s the nature of reporting news, especially during an election year.  Right now we are being bombarded with election season rhetoric.  The candidates naturally want to display that things are bad so that they can talk about how much better things will get if they’re just elected.  You’d do the same thing if you were running for President.  We had this same heightened attention on the economy back in 2004 before those presidential elections.  Once the election season was over, the economic talk was not nearly as negative.

Plus, glum numbers are rarely put into relative terms.  If a statistic is relayed in a 90-second news blurb, I just don’t know HOW to feel about that statistic.  Am I supposed to feel terrible because payrolls went down 17,000?  Worried?  Re-assured because it wasn’t worse?  What should that 17,000 mean to me — anything?  And when it is said that this number or that is at the lowest level in four years, I want to ask “but how low is it historically?”.  I want to know — and rarely hear — how that number might compare with 2001 or 1992 or 1985 or 1932. 

Rich Karlegaard writes in this week’s edition of Forbes magazine along the same lines, in Four Wrong Reasons for Pessimism.  One of the points he brings up is that the glum economic mood is tied to a reflection of unhappiness with President George Bush.  No matter which political party you belong to, you have to admit he is not a popular President right now. That colors the perception people have of how well the economy is doing. Seventy percent think the economy is off track, the same percent that are not happy with President Bush. Yet, as Karlegaard writes: “When asked about their own individual economic prospects, half of Americans say they feel positive about the future. About their lives, 84% say they are satisfied.”

And that’s the point. Your personal or your business circumstances are not the same as the Economy-with-a-capital-E. So much of running a business successfully is about your own mental attitude – whether you approach issues positively – and your daily decisions.  The day to day factors have more impact on the success of many small businesses than do macro-economic issues. 

For sure, if you’re in a housing or mortgage related industry, things have got to be tough in many parts of the country right now. And some businesses are being especially hard hit, such as if they rely on gas or heating fuel (landlords, businesses with fleets). I feel for you, if you are in one of those industries being hard hit right now.

But aside from selected industries, if you’re like me, your business is probably more affected by day to day issues, rather than macro-economic issues.  I’m more focused on the possibility of one of our computers being on its last legs, or making sure that all data is backed up, or growing traffic to this website, or finding affordable help to run this business, or pricing issues. What’s more, these are decisions as a business owner I have more control over than macro-economic issues.

You can have a far greater impact on your business’s success by focusing on issues within your control, than by being a fatalist over a gloomy jobs number. 

8 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

8 Reactions

  1. Recessions and slow downs should not be feared and can be taken advantage of. It’s an excellent time for startups, expansion, and marketing. Even in the worst recession, the economy doesn’t stop.

    This is the time to buy low so you can sell high later. The real estate market is an excellent example; people are still buying and selling! The buyers today will be envied tomorrow.

  2. Some of my day to day issues mirror yours Anita. Thank you for the reminder to stick to our knitting. My husband would like us to consider buying RE in the NE Ohio market because of how the mortgage industry crisis has hurt the market there. His eyes are twinkling as homes in some of our favorite neighborhoods are going at unbelievable prices. Tempting but so distracting. We’re pretty busy right now with current contracts and a first born heading off to college this coming fall. Your post was timely for me.

  3. Anita,

    Excellent advice in these trying economic conditions.And of course,”situational hardship” based on the business you are in is the key. But, I would like to point out that in my industry, many of my clients come to us in a state of rage because they have been severely manhandled by the local banks that they went to in order to obtain working capital for their small business. They are denied credit, often in a not very dignified or pleasant manner, because the banks look upon them as a lending risk, rather than a job-creating business entity. What will these local banks do when economic conditions return to normal and they now seek out the small business owner?. You see Anita attitude is NOT everything!!

  4. Anita Campbell

    Hi Raymond,

    I’d be the first to agree that attitude is not everything. You cannot wish your way to success!!!!

    This sounds to me like the banks’ loss. Business owners may have to work harder to find working capital during these times. Maybe look at alternative sources, like factoring of receivables, where debt ratios are not an issue.

    Hey, I don’t purport to have all the answers for every business in every situation during a recession. But I do know this: if you think you can’t, you can’t.

    And winning STARTS with a positive attitude, although it does NOT end there.

    What would you suggest, Raymond?

    Anita

  5. Looking back at the last recession and seeing what small business succeeded and why they did can save a lot of worry and stress. The post has good points and perhaps it is a good time now to review your business, customers and competitors to take advantage of opportunities instead of stressing what might happen when the economy slows further.

  6. The United States of America is still the Land of Opportunity. I think it is good that questions are raised regarding why the U.S. economy is going downhill. Please feel free to comment on my post, Bearish US Economy.

    Do you think a “John Galt Plan Might Save U.S. Financial System”? Read Caroline Baum’s article on Bloomberg.com. Here is the link (short URL): http://pophae.notlong.com

    Best Premises,

    Martin Lindeskog – American in Spirit.
    Gothenburg, Sweden.

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