Most salespeople focus on converting prospects into customers or selling more to existing customers. If you want to understand how the economy affects the industry, you must also pay attention to small-business growth and economic indicators such as the gross domestic product and unemployment rate. Paying attention to these indicators can help you identify sales trends and use the information to your advantage when approaching potential customers about buying your products or services.
The gross domestic product, also known as the GDP, is often used to determine the state of the economy. This indicator refers to the value of all the goods and services produced within a specific country during a specific period. The United States has its own GDP, but there is also a world GDP that describes the value of all the goods and services produced globally. In many cases, experts compare the GDP to the GDP of the previous period. If the quarter-to-quarter GDP increases by 2 percent, this means the economy has grown by 2 percent during the quarter.
Although this indicator is often used when discussing the health of the economy, some experts believe that it is an outdated way to measure economic growth. They argue that the world needs new economic indicators that take environmental costs into account. Simon Kuznets recognized this in 1934, when he said that the GDP does not address the distribution of wealth in a nation. He also says that if the GDP is too focused on the wealth of an entire nation, income gaps could put the health of that nation's economy in jeopardy.
GDP is directly related to small-business growth because small businesses produce many of the goods and services included in the national and world GDPs. A report released by the SBA Office of Advocacy, titled "Small Business GDP," indicates that small-business growth has slowed in the past decade. Ten years ago, small businesses produced a larger share of the GDP. There is some good news for small businesses, however. Small businesses continue to create jobs and spur economic recovery, making them valuable economic assets. In 2008, small businesses produced nearly half of the nonfarm GDP in the United States, making small-business growth an important economic indicator.
As a sales professional, the amount of small-business growth that occurs during a specific period affects you in many ways. If the economy is good, small-business owners tend to hire more workers. This creates additional job opportunities for people who have experience selling products and services to consumers and business professionals. Small-business growth also affects the amount of money consumers and business owners can spend on products and services. If there is a decline in small-business growth, you may have a harder time making sales. This is because people do not have as much money to spend on discretionary purchases as they do during times of economic growth.
Learning new sales techniques is important, but you must also watch the economy for signs of change. Small-business growth has an impact on the GDP, so you may have to adjust your sales strategy based on recent economic trends. Doing so can help you ride out tough times in the economy and keep your job even during times of slow growth.
(Photo courtesy of jscreationzs / freedigitalphotos.net)
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