It seems that sometimes the darkness of an economic slowdown will never end until it swallows your money like a pelican gulping down a fish. Well relax, that’s not the way it is. Good times follow tough times - it’s inevitable. They call it the economic cycle, and it’s been around since people started measuring such things. It’s just as important for a business owner to plan for the coming boom, as it was for them to prepare for the recession. But when do you start? How does one know it’s really over?

There are no clear, defining lines from recession to boom. It isn’t like throwing on a light switch in a room. It’s more of a slow, gradual dawn lighting up the eastern sky, taking its time to arrive. We want to find trends, not sudden eruptions from good to bad-we want to go from bad to just a little less bad.

It’s different this time: Sure it is, and the check’s in the mail and you’re my one and only. Don’t believe what you hear from the economic pundits. Economics was invented to make astrology look good. In the late 50s and early 60s we had an economic boom partly based on new technologies like transistors. The “nifty fifty” stocks reigned supreme and surely it was different this time. Then along came the early 70s and the Arab oil embargo. We were going to run out of oil in eight years, they said … it was different this time. Then we had the inflation and high interest rates of the late 80s, stock market crash of 1987, the 90s Internet boom, technology meltdown of 2000 followed by 9/11 and now the sub-prime crisis. Every downturn was followed by an economic boom and vice versa. It’s never “different this time” and this is no exception. So let’s start planning for the inevitable resurgence of economic growth with two questions:

1. Are we at bottom?
2. What business steps should we take if we are entering a recovery period?

OK, let’s look at the first one: Are we at the bottom? To answer that question we must first realize that it’s a regional game more than a national one. Las Vegas may be in a boom while New York is in recession. As of this writing, home prices, which are one economic indicator, reflects this regional disparity. US News and World Report states in their June 3, 2008 edition that home prices are UP 11.8% in Mobile Alabama and 6.7% in Jacksonville, Florida from a year ago. During that same period, the Washington Business Journal’s May 27, 2008 edition states the Standard & Poors/Case-Shiller Home price Index fell nationally by 14.4%.

So to figure out if we’re in a less-bad period, (no one can find the actual, exact bottom) look locally for the signs:

A surge in residential home sales, or at least a drop in the length of time homes stay on the market.
Increase in new construction means builders are experiencing a demand that will have ripple effect on the local economy (think appliances, local building materials outlets, etc…)

Decrease in vacant commercial properties and increase in commercial construction.
Easier credit from local banks
Lower interest rates for mortgages and consumer credit
Decrease in local unemployment
Increase in “help wanted” ads

All these signs, and more, indicate improving economic conditions locally. Once you see these positive signs, it’s time to analyze your finances for the right course to take.