With lots of thriving, small businesses here in the mid-Atlantic, we have plenty of reasons to be thankful and celebrate what is happening with today’s economy. We experienced a steady recovery and a bolstering of the overall business community since the significant challenges of the ‘great recession.’ While it feels as if there is finally some hope, release of pressure and confidence in the market again, that doesn’t mean we shouldn’t consider there may be tough times ahead. It is never too soon to start preparing. The sooner we begin to prepare, the less impact the next downturn will have.
With business comes the unknown – economic cycles, health concerns, consumer preferences, industry discoveries, trade agreements, political challenges, etc. You name it, there are a wide variety of things that bear great influence on the economy and, in turn, on your business. There are many things outside of our control, however, it is our responsibility to steward what is in our grasp to the best of our ability. As we reflect on previous downturns, we should use that knowledge to prepare for whatever is next.
Here are five things to consider today to help prepare:
- Prioritize your values. Your values are paramount because they will continue to drive your business decisions regardless of the state of the economy. Make note of them and return to them to maintain accountability. Good questions to ask are, “what is in my hand to do?” and “how can I get to where I want to be?”
- Put everything on the table. Evaluate every element of your business on a quarterly, if not monthly, basis to ensure what you are doing is effective. If things begin to trend downward or degrade and become unprofitable or counter to your priorities, the quicker you catch it, the easier it is to correct.
- Cash flow is king. There is no substitute for being able to fulfill your obligations. Your obligations have been set by your business decisions which are based on your values. If you are unable to fulfill those obligations, then you need to revisit step one and adjust from there.
- Reserves matter. Cash flow is important, it will carry you through, but there are often unforeseen factors that require attention. To preserve your cash flow and maintain future earning potential, it is imperative to have reserves. It will make or break a business when the cycle turns. There is no time like the present to start a savings account as rainy days will come eventually.
- Ask Questions. There is always someone else who has been where you are, has a different perspective, or has information that you do not have. Never stop learning. The best leaders don’t wait until they are in trouble to evaluate, seek guidance, or gain additional information. Ultimately, you are responsible for your financial decisions, but it does help to have all the information you possibly can. It is impossible to ask productive questions if you don’t know where you are or what direction you want to move in.
There will always be opportunities around the corner, some come from obstacles and others from openings, its how we prepare ahead of time that dictates how we are able to steward them. It is not about what one has or doesn’t have, downturns are not respecters of persons, its about what one does with what they have. As you look toward preparing for the future, the Univest team is here to help. Contact us at 877-723-5571.
Univest Bank and Trust Co. is Member FDIC, an Equal Opportunity and SBA Preferred Lender.