The business cycle is one of my boss’s favorite discussion topics. If you want to be successful in business or be a successful event producer you need to know about the business cycle. You better pay close attention to your performance and financial statements so you know your business cycle stage.
Business cycles are often described as periods of expansion and recession in the course of business. The cycle happens over and over. There are three main stages to the business cycle. The stages are growth, stability and decline. It is important to have good accounting so you know what stage your business is in at all times. If your business slips into decline and you see the trend in your numbers it is important to find a way to grow, or you may just go out of business.
The business cycle also applies to special events. Many long term events stay in the stability stage for a long period of time. Events are able to maintain the stability stage a lot longer than most businesses. I’m in that situation with one of the events I produce. The event saw rapid growth but then over the last three years the numbers have been very stable. They are great numbers, but we aren’t seeing much growth. I don’t want to see the event get in to the declining stage, so we are trying to add more value and new experiences for event attendees.
Another event I plan, Nugget Star Spangled Sparks, is in the decline stage. This year is the 17th annual event. The event saw nice growth the first ten years. Then the event became stable. Sponsorships weren’t growing, revenue from food and beverage wasn’t growing, it was all stable but no real growth. This was pretty good considering it was the great recession. Then over the last six years revenue has slipped and the event has been hit with rising expenses. Even though the economy has improved, the event’s financial statement has not. This has pushed the event into the decline stage. The event has lost a few sponsors and seen event production expenses rise. Now we are faced with the reality the event is in the decline stage.
The decline stage doesn’t have to last long. This is the time to come up with new ideas and adapt to the business climate. That is why we are adding more daytime activities to Star Spangled Sparks. For example, this year the event will have a Patriotic Bike Parade for kids of all ages. Right now we are looking for the perfect sponsor for the bike parade. Maybe I’ll call Geoffrey the Giraffe at Toys “R” Us tomorrow to see if he is interested.
Star Spangled Sparks will also feature craft vendors for the first time. We are trying to find additional sponsors and accepting donations through a GoFundMe campaign. With any luck all of these efforts will bring the event back to the growth stage and we can continue to expand the event for future generations.
The business cycle is important to consider when you produce special events. Especially because analyzing the business cycled doesn’t leave room for denial. As long as you keep good records and accurate accounting you should be able to tell what stage your event is in the business cycle. Don’t ignore the cycle and you will be able to live through the decline stage and find new growth opportunities.
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