Risky Business

When the economy is going well and your business is humming, all seems good. But what happens, if there is a downturn? Is your business ready? Are you?

What can you do before the downturn hits or signs show it is coming?

1. Don’t panic – reactive moves generally only focus on the short-term immediate situation and usually does not consider the other ramifications.
2. Sit down with your financial advisors and review your current financial information. Ask how you are trending not only to previous years but to the industry. You need to know! It will result in answering the following questions:
3. Are your margins acceptable?
4. Are you properly staffed or do you have excess capacity?
5. Are your sales where you need them to be? Do you have the right client mix? No one likes to say no to a sale but sometimes it is the most profitable thing to do.
6. Review all your expenses even the ones you think are insignificant. It is the time to review your staffing needs and do you have the proper people.
7. Do you need to adjust your methodologies? Are they still the most effective or are you just doing it the same way because you always have.

In a downturn economy, even more importantly, in an upturn one, it is always prudent to take stock in where you are and where you need to go.

Prevention is much better than a just reaction.