Subscribe to Blog ContentI previously mentioned several mammoth companies that got their start during a recession. These companies just go on to show that the recession is no excuse for not starting a business or growing your business. Furthermore, the recession helps you sharpen how you spend and protect your cash flow.
A recession forces business owners to watch every dollar that goes out and the cash flow. Because you don't want your business falling into the trap that so many are (going bankrupt), knowing how tough times are compels you to improve cash flow monitoring.
When things turn around -- and they will -- take care not to get carried away with your cash flow. Continue watching the cash flow and you'll reap rewards that you might not otherwise if you return to old habits of spending freely on things your business doesn't need. This attitude ensures you remember your business goals and focus on them instead of straying from the main purpose.
Challenging times also motivate you to find better ways of doing things. In doing so, you might surprise yourself and discover a new product that aligns with the company's purpose and goals. Involve employees in finding ways to cut costs, innovate, and do things better.
Also take advantage of this time to build and improve your relationships even with clients who can't buy right now. When they know you're there for them during tough times, they'll come back to you in better times.
If fear is getting to you, perhaps you can take comfort in this Q&A between CNBC and Warren Buffett:
CNBC: Will everything be all right?
Buffett: Everything will be all right. We do have the greatest economic machine that man has ever created. We started with 4 million people back in 1790 and look where we've come. And it wasn't because we were smarter than other people. It wasn’t because our land was more fertile or we had more minerals or our climate was more favorable. We had a system that worked. It unleashed the human potential. It didn't work every year.
We had 6 "panics" in the 19th century. In the 20th century we had the Great Depression, World Wars, all kinds of things. But we have a system – largely free market, rule of law, equality of opportunity – all of those things that cause the potential of humans to get unleashed. And we're far from done. Your kids will live better than mine. Your grandchildren will live better than your kids. There's no question about that. But the machine gets gummed up from time to time. If you take the bulk of those centuries, probably 15 years were bad years. But we go forward.
If you read the interview, you'll notice Buffett says many positive things. Yet, as Roy H. Williams points out the title of this particular interview is "Warren Buffett Says ‘The Economy Fell Off a Cliff."
So shake off the fear and use the recession as an opportunity to stay on top of your cash flow and expenses and perhaps, discover better ways of doing things.
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