An Uncertain Recovery

  April 23, 2012

  Read Time: 1 MIN 30 SEC

As the presidential election campaign swings into high gear, the candidates are busy explaining how they are going to “fix” the economy, create jobs, and generally make us all a lot happier in our businesses and our lives. It’s interesting – sometimes downright entertaining – to hear some of what they have to say. More often than not though it simply isn’t true.

Most business owners and managers realize that the fuel that stokes the economic engine of the nation comes directly from them and their businesses. The government employs a lot of people directly but expecting the government to create private sector jobs comes with the understanding that the government must provide an environment to fuel businesses to grow. With the deficit already looming at unmanageably high levels, allowing this to happen makes no sense whatsoever. The reality is that businesses must create jobs, not the government.

Creating jobs however can be risky. Adding headcount when the health and direction of the economy is unclear is a step many business executives, owners and managers are reluctant to take. For that reason, businesses are increasingly turning to technology and process automation to improve productivity and reduce costs in order to remain both competitive and profitable in the face of a still unstable economy and unpredictable economic outlook.

For big businesses and large corporations, this approach has already yielded tangible results. Corporate profits are at an all time high, and many major companies are sitting on mountains of cash. This doesn’t do the economy much good however since most CFOs are of the opinion that the global economic situation is still too volatile to jump back into the capital investment game. They are waiting it out on the sidelines to see what happens next. And the financial dramas playing out all over Europe don’t do anything to instill confidence in a return to global economic stability.

Small and mid-size companies have a different problem, however. They have not enjoyed massive profits and are not sitting on mountains of cash. Indeed, for most small and mid-sized businesses, cash is at a premium. If these companies are lucky enough to have a line of credit, they typically need to use the money for day-to-day operational shortages, not to fund the purchases of new equipment.

The lack of available cash however does not diminish the need for capital investment. Small and mid-size firms are aggressively pursuing new strategies that allow them to reduce costs, increase productivity and become more competitive. They understand that these problems can be solved exactly the way large corporations have been solving them – by acquiring new equipment and then restructuring and streamlining internal processes. The only question of course is how to pay for this.

Herein lies a tremendous opportunity for companies that provide the equipment these companies need to become more efficient. Selling equipment to businesses that desperately need it is no longer enough. The key is to make the equipment accessible and affordable for companies that lack the financial wherewithal to buy it outright. Flexible financing solutions that can be adapted to the specific needs and financial requirements of a business literally become a strategic advantage that any small or mid-sized business can – and will – take advantage of.