If you don’t realize that another recession may be coming on, this is the time to pay attention!
Without going into the details of the disappointing economic indicators in this country, the continued concern expressed by the Federal Reserve, the disappointing earnings announcements from our major corporations, the resurgence of consumer staples stocks, the financial crisis in Cyprus, Mario Draghi’s recent comments that the ECB won’t be bailing out any financial disasters, and the many difficulties faced not only in the EuroZone but also in Japan … well, is the list long enough yet?
Entrepreneurs must always be conservative with their cash. Careful planning helps with this, but often we look at the future with rose-colored glasses. This is not the time to do that.
This is the time to stop spending money you don’t absolutely have to spend. Don’t buy a lot of inventory or hire a lot of people to meet what may turn out to be overly rosy projections of future business. It may not materialize.
Do keep building your brand. Do keep actively promoting your company. Aggressively pursue new contracts and customers. Overwork your staff. Go forward as a lean company. Monitor your inventory carefully and make preparations to replenish only when needed.
The near economic future is looking weak so prepare for it. Scrutinize your expenses for ways to cut back and set benchmarks that trigger those cuts.
Enlist the help of your employees. Have an honest talk with your company about the uncertain economic future and the necessity to improve efficiency on as little cash as possible. Emphasize that this is a way of cutting waste and building reserves in case the worst happens. Ask each manager to prepare a lean budget and plan how to quickly ramp down and ramp up depending on business flow. This is the time to turn your entire company into one big team.