Back in Q4 2009 this writer published an article in EDAcafe.com entitled, “The Role of Business Planning”. If you are interested, you can still access this article online at:
http://www10.edacafe.com/nbc/articles/view_weekly.php?section=Magazine&articleid=757090

In the Introduction to that article, I listed some Q3 2009 signs that the US economy was beginning to recover from the recession that began in December 2007. Such signs included the fact that GDP had finally turned positive in Q3 2008 after four consecutive quarters of contracting economic activity. Also cited was the fact that stocks in general had then surged about 50% since their March 2009 lows. Venture capital investments in the San Francisco Bay Area in Q3 2009 also ticked up for a second straight quarter, per an October 20, 2009 report from the National Venture Capital Association.

At the same time, I argued that in early Q4, we were still far from being out of the woods. While venture investment was up slightly in the SF Bay Area, across the USA venture capitalists plugged only $5.1 billion into 616 deals during Q3 2009, down 6% from the previous quarter, according to Dow Jones. Moreover, during most of the summer and fall of 2009, we were still losing jobs every month. Despite the fact that President Obama's $787 billion stimulus plan had saved or created more than 1 million jobs, unemployment was continuing to rise, with the US economy having lost 7.2 million jobs through October 2009 since the recession began.

Once we entered the New Year, things began to get even brighter. On February 26, 2010 the US Bureau of Economic Analysis said that the real Gross Domestic Product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 5.9% in Q4 of 2009, according to the "second" estimate released by the Bureau. The first (preliminary) estimate that appeared on January 29, 2010 of Q4 GDP was +5.7%. The Q4 2009 GDP was the fastest growth pace in more than six years. In the third quarter of 2009, real GDP had increased 2.2%.

On March 5, 2010 the US Labor Department reported that US employers cut a smaller than expected 36,000 jobs in February 2010, leaving the overall US unemployment rate steady at 9.7%. Moreover, job losses for December and January combined were revised to show 35,000 fewer jobs lost than previously reported. The labor market was gradually improving and the pace of layoffs had slowed markedly from early last year when the US economy was losing 750,000 jobs on average a month. Manufacturing actually added 1,000 jobs in February 2010. Also, temporary hiring added 48,000, a sign that more permanent hiring would lie ahead.
On April 2, 2010 the US Labor Department said employers added (you read it right! added!) 162,000 jobs in March 2010, the most since the recession began in December 2007. The March 2010 total includes 48,000 temporary workers hired for the US Census. The department also revised January's job total to show a gain of 14,000, up 40,000 from a previously reported loss of 26,000. February's job numbers were also revised higher by 22,000 to show a loss of only 14,000. The economy had then added jobs in three separate months since the recession began. Private US employers alone added 123,000 jobs in March 2010, the most since May 2007.

Many people forget that the US economy needs to add more than 100,000 jobs a month just to absorb new entrants into the labor market, let alone provide a livelihood for the 15 million Americans already looking for work. Without constant, robust growth, such as during 1993-2000, the unemployment rate won't budge. In past recessions, it took years before employment numbers returned to pre-recession levels. In March 2010, Manufacturers added 17,000 jobs, the third straight month of gains. The average work week increased to 34 hours from 33.9, a positive sign. The unemployment rate remained at 9.7% for the third straight month. The increase in March 2010 payrolls is the latest sign that the economic recovery is gaining momentum and healing in the job market is beginning.

Then Dave Rosenberg of CNET reported that on April 11, 2010, the private company research firm CB Insights released new venture investment data for the first quarter of 2010. Overall, the news is very positive with strong growth in the number of deals from 687 in the fourth quarter of 2009 to 731 in the first quarter of 2010.

The first quarter of 2010 saw $5.9 billion invested across those 731 deals, a marked increase over the year-ago quarter when only $3.9 billion was invested across 483 deals. And while CB Insights notes that $5.9 billion remains far below quarterly levels seen before the '08-'09 recession, there is some belief that "the VC asset class has perhaps reset at a lower but ultimately more sustainable and healthier level." The fact that VCs are opening their collective wallets, even for smaller deals, is good news for both entrepreneurs and the economy as a whole.

Want to give it a try? Just remember, there is at least one business activity for which producing an effective business plan is mandatory. This occurs when an entrepreneur wants to raise equity capital from an angel investor or a venture capital firm. This has been so, at least as long as this writer can remember. To confirm, just check out the web sites of any venture capital firm; you will find that submitting a business plan is the minimum price of entry.

Seems a perfect time to take advantage of a new Planning Tool Kit Special Promotion from Henke Associates. Check out the home page of http://www.henkeassociates.net