2009 Indiana CEO Survey

Lee Lurton - – Panel Member at the July 9 CEO Breakfast and Discussion
President, Benefit Concepts of Indiana Inc.

Benefit Concepts of Indiana Inc. is an employee benefits broker/consultant with over 100 small to medium sized clients, mostly in the central Indiana area.  There were several areas of the CEO survey that I found particularly interesting and wanted to comment on in this blog.

Comments Regarding Raising Capital:
More of our clients are in survival mode and trying less to raise capital. Few need additional capital for expansion of their business, and the ones who are in the survival mode do not qualify for bank loans.

Comments Regarding Indiana’s Economic Climate:
Thanks in part to the Indiana Economic Development Commission (IEDC) I believe the problems we have here are smaller than the states surrounding us. Indiana is certainly much more "small business friendly" since Mitch Daniels became governor and appointed Mickey Maurer as the first head of the IEDC.

Comments Regarding Talented Managers: 
In difficult economic times good business decisions are more critical than when profits are good and mistakes can be absorbed with good margins. Even a small mistake (bad business decision) in difficult times can have a catastrophic effect on a small business. Being part of the human resource team, we believe that for most businesses their human capital is their most valuable asset. Talented managers are essential at any time, but critical in difficult economic times.

Comments Regarding the Survey Finding that Large Businesses are Cutting Costs in the Current Economic Climate and That Small Business are Seeking to Increase Revenue: 
Upon getting an advance copy of the survey, I did my own small, informal survey and called a few of our clients. This, in addition to conversations with many clients over the last several months leads me to believe that small businesses are cutting costs, just like the larger firms in the survey. One example is of a commercial woodworking firm who told me that when bidding on a project in the past they would expect to bid against four to five competing firms. Now that number may be as high as 20 competing for the same job. Margins were expected to be three to five percent, now with margins lowered to 0 percent they are winning few, if any bids. As a result, for the first time they have closed their production lines for four weeks this summer. Most of our clients are having a difficult time increasing revenue and have been forced to cut costs. This includes any business related to the construction industry, auto, manufacturing and even the service industries.  The majority are taking a very conservative approach to revenue forecasts and many are deciding what additional cost cutting measures may become necessary if the economy does not rebound in the next two to three quarters.