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In working with small business owners or owning a small business, certain things are learned.
One is the value of seeking clarity that can help in making good decisions. This starts with the reality that a business owner faces hundreds of decisions on a weekly, even daily, basis.
We all use certain principles to help us make those decisions, like waiting to have all available information before moving forward, for example.
There are hundreds of principles like this and all of them are “good.” A good manager has the judgment to know how to quickly sort through the thicket and select which principle is the right one to apply when making a decision.
Unfortunately many managers don’t understand this and stick stubbornly to principles that don’t fit the situation at hand. Other managers are like windsocks, adopting new principles as randomly as the wind blows.
The ability to make the right judgment is rare and valuable in business management, but applying the right basic principles can help.
Sometimes speed is the name of the game and can be more important than waiting to have perfect information. When facing an economic downturn, moving quickly is one of the paramount principles and one of the secrets to small business survival during recessions.
Make cuts quickly to preserve cash. Days and weeks can be consumed attempting to get perfect information on every expense line item and the result could be losing tens of thousands of dollars in order to save hundreds.
Big Things First
What are your major spending items? You can spend half a day going through the cell phone bill later.
A Sense of Urgency
It is cliché to say “hope is not a strategy.” That’s true, especially in a recession. It’s tempting to hesitate before making cuts because they are painful. It’s easy to tell yourself things will get better next month. Your business is your lifeline to your livelihood, and that of your employees. A recession is an existential threat to that. Even a small probability of losing it should be taken very seriously.
“If it were easy, everyone would be doing it,” the saying goes, so seek help.
As noted, you need good information to make good decisions. That means timely, accurate and relevant accounting. You can and should expect it, and it is more important now than ever.
Also, having the latest technology is one thing, but you also need the expertise to help you interpret what the gauges and dials are saying. Even a pilot needs a navigator. So if you’re not the most savvy around financial statements, that’s okay, but it’s important to find someone who is that can help you.
Otherwise you are flying that plane at night through the mountains, with no instruments to guide you. You may make it fine, but why take the chance? You’ve got enough on your plate.