Over the last couple of weeks I have posted a few articles on measuring key business indicators, How Do You Measure Success, and formatting a report for these indicators, What is a 12 Month Rolling Trend, so that you can look for important trends in your business.
One aspect of watching for business trends is to look at the general state of the economy so that you can ensure that your business is prepared for potential marketplace shifts. One of the best tools I have seen for doing this is from Peter Navarro and his book Always a Winner: Finding Your Competitive Advantage in an Up and Down Economy
. In this book he lays out and defines the following formula;
GDP = C + I + (X – M) + G