Editor’s note: Michelle Stockman is involved in marketing, community relations and implementing entrepreneurial programs statewide for Little Rock-based Arkansas Capital Corp. She is the former director of the Innovation and Entrepreneurship Center in Fort Smith.
Business owners who stay in their industries long enough will see good and bad times with their business financial health. Besides industry fluctuations, the economy ebbs and flows on a fairly predictable schedule. Preparing your business for the challenges of staying on top of the cash-flow roller coaster is the job of a flexible and prepared leader.
Luckily, there are a few practical measures a business owner can take when there are clear signs that the industry or economy are in a negative place and the business is starting to see cash flow dry up. However, the business leader needs to see signs of distress before the business is impacted.
First, in economic hard times, you need to re-evaluate your finances. That includes looking at current spending, production and staffing. Look at pending expansions or new product introductions, as well as your overhead. Since there is always some fat to trim out of a budget, now is the time to identify the excess and trim it off your cash flow.
Second, re-evaluate any new product development, staffing or business expansions. Can you put any plans on hold until the economic hard times end? Can you scale back extra features on products and introduce them later?
Lastly, it is time to roll up the sleeves to work hard in surviving tough times. You may need to adjust your business plan to meet the demands of saving money while serving your customers. Now is the time for an innovative idea for your company’s survival and the entrepreneur needs to lead the way.