"A Billion Here, a Billion There, and Pretty Soon You're Talking Real Money"

By Kevin F. Clune, CLP

Everett Dirksen (1896-1969) a Republican senator from Illinois, is often credited with this saying. This quote was the basis of a recent article by Richard Benson in his newsletter, "Benson's Economic & Market Trends" Report of April 8th, 2010. Mr. Benson then elaborated on the current government spending programs, wherein he noted that "As of April Fools' Day, the exact total of US open market debt is a whopping $8,294,870,658,096.94." Therefore, he concluded that the quote needed to be "brought up to date" and changed to "A trillion here, a trillion there...."

How does this fact affect the budgetary decisions that you as a business owner are making as a result of this staggering amount of government debt? At the very least, you probably have a case of the jitters like we do. This skittishness explains the high unemployment rate with no new jobs being added. The fear of the unknown in coming legislation is strangling growth.

In conversations with some of you, we are hearing that reactions include:

  1. Hunker Down
  2. Further Tighten the Budget
  3. Really Engage Customers
  4. Use More Aggressive Marketing

Since Clune & Company is in the business of financing equipment acquisitions, we are keenly aware of the downturn in new purchases. The effects of the stimulus package are yet to be felt by most industries. Most businesses have adopted a policy of foregoing normal replacement of equipment, resulting in an undeniable "pent up demand" in the market place.

Businesses are also feeling constricted due to the reduction or loss of their line of credit from their banks. With this development, many are turning to alternate financing such as leasing. However, only essential equipment is being added or replaced.

Prudent business owners are also reviewing existing contracts they may have with their banks or other creditors. We heard from one vendor that his customer had discovered that their company had had a copier on lease with one of our competitors for eight years on a three year lease! The Lease had been illicitly automatically renewed for an additional five years by the leasing company! Unfortunately for this company, there was not an oversight policy in place that would have detected this expense. In this economic climate, however, a thorough financial analysis is essential to becoming a profitable business.

On a more positive note, another outcome is that you have calmed your nerves, decided to stay the course, and to get down to business. You are becoming more engaged with your current customers, and aggressively making efforts to keep their business. Our sales staff has embarked on a phone campaign to reach out to our customers on a cyclical basis and inquire as to their needs and satisfaction with our products. We realize now, more than ever, that our continued success depends on providing a necessary and quality product. The practice of waiting at your phone, computer, or blackberry for the calls to come in is a path to oblivion.

Our route going forward is to become more proactive in promoting ourselves and our products to existing customers and developing new relationships. With a recognition that the government debt is out of our control, your only power lies in taking care of your own piece of the economy, to the best of your ability. Let us help you do the same with your clients and customers. Making you look good is an important part of our business.

Adopting a conservative business plan, examining and restructuring current commitments, and engaging the marketplace are all positive reactions to the looming debt.

It has been a rocky boat but righting the ship, plugging the holes, and setting out on a charted course is the best path forward.

Kevin F. Clune, CLP