The economic roller coaster can sometimes serve to make poorly-run businesses look strong for a season while capsizing others who are unprepared to weather a cash flow crunch. When the overall economic water level recedes, exposing dangerous rocks in a tough market, only those who have adequately planned for navigating rough waters will stay on course to achieve long-term success.
In fact, many leadership companies prosper and build market share over the long run by staying prepared to weather the downturns and strategically improve their market position, sometimes by acquiring failing competitors. They do this by maintaining a strong balance sheet and superior operation platform through the tough times. Those who buy expensive market share during a booming economy, and sometimes become operationally sloppy due to exploding volume, can tend to be the victims when things turn down. On the other hand, resilient companies who successfully stay focused and work to even improve their business during down times are often able to build market share less expensively in the aftermath of a slowdown, while their wounded competitors are preoccupied with survival.
For a business owner planning to stay in business for a decade or more, making specific plans to weather - and even prosper - through recessionary times is a necessity, as there tends to be a national economic recession every six years or so. While economics is a murky science at best, being prepared for what may lie around the corner is a leader's responsibility.
So how well are you prepared for the next economic storm?