In times of economic uncertainty, business owners and managers will frequently manage “not to lose” rather than managing to win. Although I tend to be conservative, I do not subscribe to nor advise the “manage not to lose” philosophy. Times of adversity and challenge always present opportunities to grow and improve your business – if you are prepared to take calculated risk based on timely and accurate information.
Think about it, some of the best, largest and most successful businesses in the U.S. were started during recessions – FedEx, Burger King, GE, Microsoft, IBM, HP and others. Had their owners and managers simply managed “not to lose”, undoubtedly they would not be the industry leaders that they are today. Gratefully they did not, they managed to win, took calculated risks and the rest is, as they say, history.
I found this great statement in Entrepreneur Magazine to emphasize my point, “The economy tanks. You have two options: hole up in a bunker and hope it ends before you run out of tinned peas, or innovate and emerge stronger than when the economy took the hit.”
Look around, evaluate your industry and business, if your competitors are managing “not to lose”, what can you do to gain market share, increase your customer share and grow your business? Properly considered, increasing customers/clients during a recession, even though the average revenue per customer may be lower than you would like, you build in significant potential revenue growth as the economy recovers. If you don’t have the information that you need to “manage to win” by taking calculated risks, CFO Solutions can help you evaluate your strategy, model the impact of different assumptions and move forward with confidence.
Tags: Financial Advice