When the Economy Slows What is Your Plan?

Think about this, when the economy slows what is your plan? Throughout history the economy has had periods of growth, decline, or merely remaining stagnant. Often a company is humming along nicely when suddenly, in what seems to come out of nowhere, the economy begins to stall and that same company appears to be stuck in the parking lot, unable to find a way out to get back on the road to new growth.

The Macro-Economy

The macro-economy is really just the big picture. For the most part it is out of the control of individuals and companies. Yes, both can put political pressures on politicians, but that doesn’t mean they will take action, and, even if the politicians do act there is no guarantee what they do will produce positive results. So, just accept that the macro-economy is the overall playing field and get rid of any delusions you can change it.

The Micro-Economy

The micro-economy is a totally different ball game. It generally involves activity within your particular industry and your company. The question, “when the economy slows what is your plan?” is now one for which you can provide some answers. For example, if the economy slows down you can so some of the following, all of which you should be doing before the economy heads south:

  • Look at what competitors are doing
  • Examine your product offering to know what to keep and what to eliminate
  • Have a plan to cover essential functions should layoffs be necessary
  • Stay on top of customer collections
  • Keep a sharp eye on inventory levels to prevent excess
  • Closely monitor banking relationships
  • Maintain good communications with vendors

These are just a few things to consider, but the point is that unless you rake the time in advance to think about how you will handle a slow economy you will find the pressure when it happens to be even greater. In fact, not having contingency plans could cause your company to fail.

out of business

Incidentally, the above can sound negative at first glance. It’s not but rather just a dose of reality designed to protect your company. If you never have to implement such a survival plan that’s great, but nonetheless, be sure you can answer the question, when the economy slows what is your plan?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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