Surviving the Economy

By nature I tend to be an optimist. One reason is that I have learned that so often we worry and fret about things that never materialize. As Mark Twain put it, “I am an old man and have known a great many troubles, but most of them never happened.” The only reason I mention this is to make it clear that these are not the things I am addressing. Rather, I’m considering the things that either already exist or have a high probability of becoming reality.

Some Things You Just Can’t Change

Like it or not, you have to live with the reality that you can’t control everything. Let’s consider the national economy. You can vote for people who promise to address the national debt and/or reign in out-of-control spending. Of course, there is no guarantee they will be elected, or that they will do what they promised, and even if they try that they will succeed in getting others on board. You simply cannot control the national economy, so it’s not one of those things to worry about. However, that does not mean that you should not have concern. After all, you have to operate within the limitations of a number of things such as the national and international economy, wars going on throughout the world, and a host of other things. Not acknowledging that will make surviving the economy more difficult.

If You Can’t Change It, Why Be Concerned?

The reason you should be concerned is that things like the national economy impact the decisions you can make. See Forget the Macro Economy | Think Micro. An example would be if the national economy is tanking, it may not be the best time to expand your business. Instead it may make more sense to see just how much fat you can cut, how much you can increase sales without more expense, and how you can position your company for an economic downturn and the eventual recovery.

Be Flexible

Of all the things you can do to survive the ups and downs of the economy plus the unexpected twists and turns of your own company, flexibility I believe is number 1 or close to it. In the blogs The Business Plan – Hold On to the Napkin and The Flexible Business Plan we looked at some ways to accomplish this; mainly by not getting locked in to a course that cannot be changed quickly. The old KISS (Keep It Simple Stupid) principle is another way of looking at this idea. Don’t misunderstand, there are certainly times when a fair degree of complexity is required. However, the idea is that by keeping the overarching concept as simple as possible, even companies with some fairly complex operations can position themselves to make quick adjustments as things change. If you think your business is too complex to be this way, just consider some examples of operations that have complexity yet still maintain the ability to quickly adapt. What about Apple Computer, Samsung, Toyota, and Amazon? These are all complex businesses as far as moving components go, but they all are organized in a way that allows them to adapt in a short time frame to changing economic and marketing conditions and seize new opportunities as they come along. They are doing more than just surviving the economy. They are prospering.

Has your company developed a relatively simple overall design for operating that is not clouded by complexities, but rather is used to direct these complexities?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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