The Upside of a Down Economy
Tuesday, September 29th, 2009Sageworks compiled this list of 4 favorable changes in the business world over the last year, showing the upside of the down economy for businesses. The data is elaborated on by Sageworks CEO, Brian Hamilton, on this Fox Business segment.
| The Upside of a Down Economy: | |
| 4 Ways Businesses Have Improved Over the Last Year | |
| Businesses Have… | Data/Reason |
| 1. Become More Efficient | Profit margins have increased in 10/15 major business sectors looking at private companies. |
| 2. Become Less Reliant on Debt | Debt levels have decreased. The average debt/equity ratio for private companies is at its lowest levels in at least 6 years. |
| 3. Gained Access to a Larger Pool of Talent for Recruiting | There is more talent available for hire. After seeing growth greater than 10% every year from ‘04-’07, sales have been flat for employment services firms in ‘08 and ‘09. This suggests that, as we know, companies are hiring less and when they do hire, they are more easily able to find talented prospective employees on their own. |
| 4. Negotiated Better Deals from Suppliers | Unlike many other sectors, wholesalers have seen decreased profit margins, suggesting that they aren’t making as much off of every dollar sold. Declining prices may have something to do with it. |
| *Source: Sageworks, Inc. Sageworks is a financial information company. | |