Depending whom you ask, 2018 has either been the longest year on record or it has been a whirlwind. Either way, business owners are likely to agree that there were considerable changes that point to a more positive future. And, as we enter the last quarter of the year, thoughts turn to what type of strategy to develop for 2019. In order to plan accordingly, it’s good to reflect on the events of this year, which often signal the direction of the new year across economic factors.
A Snapshot of 2018
The year kicked off with a new corporate tax rate and signs that the tax framework was changing after President Trump introduced tax reform. Throughout the first and second quarter of 2018, a larger group of companies reported strong earnings and unemployment was starting to see some of its lowest rates in a while. New records were also hit. Apple became the world’s first trillion-dollar company.
Yet, some industries illustrated that 2018 became a turning point for them. Retail offers the best example. There was a dramatic number of retail store closures, including retail chains like Toys “R” Us that have been around for decades but that are now just a memory from childhood. This illustrated the shift to the e-tail sector for consumers who now prefer to do more shopping online because of the convenience and better prices. Therefore, for those retailers that have migrated to the online model, there was considerable growth in 2018.
These mostly positive economic factors during 2018 then reached down to the consumer. Although facing higher interest rates and increasing prices, consumer confidence still increased throughout 2018. The higher confidence has also led to more consumers adding to their personal debt. Yet, unlike previous growth in personal debt, this one comes with the lowest default rate so far.
Overall, the consensus is that things are good. The question is, what does that mean for 2019 and how long will it stay that way?
Strategic Approaches to 2019
If you haven’t yet started your planning for 2019, here are some strategic areas that you can begin working with now to address what you know about this year and its impact on 2019. First, pre-plan now. Take an interim look at your business today and build a preliminary plan that can be refined for a year-end presentation once this last quarter ends and the final figures for 2018 are calculated.
Second, consider everything about 2018, including the aforementioned results. These results frame how 2019 will start and even where it is headed. For example, many of the tax reforms will have kicked in and you will need to address these during the first quarter of the new year when your business taxes are prepared. Start looking at what those will mean for your bottom line so you can forecast results and build that into your 2019 strategy.
Third, always go deeper than what the main headlines tell you about 2018. Invest in research reports where experts have collected quantifiable evidence. This analysis also contains detailed qualitative trends that are impacting your sector and the overall business environment. Knowing what this evidence means can further shape your strategic approach in 2019.
Finally, set, plan, and present your “2018 highlights” to customers. Use this meeting as an opportunity to plan for the first quarter of 2019 together.