Your pipeline is down by a third this quarter. Your marketing lead has walked you through the ads, the email sequence and the website, and each fix is reasonable. Meanwhile you keep explaining the drop the same way: the economy is soft, rates are what they are, and the people downtown are doing what they are doing. You hired someone so the market would be handled, and next quarter’s schedule looks the same as this one.
Another round of marketing treats the market as a department. Inside a large organization it was one, with a strategy group, a marketing team and a quarterly deck. On your own, the market is everything outside your business, and it has no owner on the payroll.
Is the market a department?
No. The market is the world outside your business, and your business is one cell inside it.
I have said this from more than one stage, and I will put it in writing. If you turned over all the money in the world evenly, to every person alive, my read of human behavior says most of it would flow back toward the same people. The people money tends to find have made a study of human decisions. They watch how humans decide to spend, hold, hire, wait and leave.
Economics is the study of that behavior. It sits under psychology and sociology, and it covers people deciding what to do with what they have. Your business is a cell in a body of that activity. If you don’t understand the body, you won’t understand what your own cell is doing: why it starves one quarter and floods the next, and why the same effort returns different results in different seasons.
The body reaches your business through three lines. Customers carry its money in, labor carries its people in, and suppliers carry its prices in. Rates rise, and humans wait on the big purchase. A plant announces layoffs, and a thousand households stop eating out. A school district passes a bond, and contractors start hiring.
Take a remodeling company in Fort Bend County. Leads fell by a third after a rate move, and the owner read it as “the economy.” In the same quarter a school bond passed and a distribution center opened six miles away, which meant a few hundred households with steady paychecks, and the sales team did not call a single one. The facts were in the paper. The remodeler saw one behavior, homeowners waiting, and missed the other, new households settling in.
Why does the economy feel like weather?
Because running a business is loud, and the loud days leave no room to look up.
The day fills with orders, payroll, the broken thing and the customer on the phone, so the economy turns into something that happens to you while you work. Here is the pattern I have watched for decades. The owner blames the economy, then the politicians who influence it, then the large institutions. All along, the rate move, the rule change and the shift in where money was landing were published and announced. In the investment community, studying that is the day job. At the owner’s level it rarely gets touched until after the fact.
A pilot has a useful habit here. Before every flight, a pilot gets a weather briefing: current conditions, the forecast, winds aloft, notices about closed runways. Weather cannot be negotiated with, and it is also published well ahead of departure. A pilot who blames the weather after landing in the wrong place usually skipped the briefing. Your market works the same way. Institutions place money in a particular order, and it filters down to your business, your customers, your labor and your customers’ customers. The announcement is the first sign. The paycheck, the lease, the permit and the purchase order arrive weeks or months later.
Rates, awards, closings and bonds are the market’s weather reports. The monthly scan below is your briefing, and it matters most when you are busiest, because the quarter you can’t afford to look up is often the quarter something is moving.
How do you read the body?
Translate each fact into what humans are now doing differently.
I call this small business economics. You don’t need a degree for it. You need a sentence you write over and over until it is a reflex. Where the paper says “rates went up,” write “people around my market are now waiting.” Where it says “a contract was awarded,” write “three hundred families just got predictable paychecks.”
You are not predicting. You are writing a hypothesis, and then you go find out whether it held.
The tool is the Monthly Body Scan from Chapter 31. You can use it freely. A behavior change that touches none of your three lines is background noise. One that touches all three is your next quarter, arriving early. Name the behavior, trace it to your business and adjust before it arrives. In my experience, the people who do this keep ending up near the money, because they are watching.
What can you do this week?
Trace the last thing you blamed on the economy.
- Write down the event you blamed for your last stall: a rate, a rule, a closing, a customer who went quiet.
- Write the behavior underneath it in one sentence. What are humans now doing differently: spending, holding, hiring, waiting, relocating?
- Name which of your three lines felt it first, customers, labor or suppliers, and how.
- Write one adjustment you will make this month because of what you found. If the answer is none, write “none,” after you have looked.
- Put the page on the calendar for the last Friday of every month, forty-five minutes, and file each page with the last. The pattern across the stack is worth more than any single one.
Twelve pages a year is an education in how your own market works.
Read the market as the body it is.
Chapter 31. Economics Is Human Behavior of The Method Trap, by John “Jonyprofit” Whaley. One idea, one story, one assignment. About the book
The people in this story are composites drawn from nearly forty years across the table from owners, executives and professionals. Names, industries and numbers are changed.