We hear quite a bit of talk lately of people speculating a recession heading our way. In fact, within some conversations you can already sense the panic setting in.
How will we manage the cash strains? How can the business survive? What should we be doing now to prepare? How will we keep our customers? Should we start letting people go?
One of the root causes of this fear is the emotion we’ve tied between ourselves and our businesses. When you build a business up from scratch or buy it and drive growth it tends to become a part of who you are. It’s often difficult to separate your personal life from your business life because your personal life is so dependent on what you do in and with the business.
Keep in mind I’m not saying these questions shouldn’t be asked; I’m questioning the context in which these questions are being asked. It’s so easy to hit personal survival mode – panic and then begin asking these questions. The habit you want to get into, however, is abandon the panic and instead plan ahead in your business just as you would any other investment.
You don’t want to make emotional decisions when it comes to your business.
The word diversify comes to mind when thinking of investments. When considering personal decisions, start to think of your business as any other investment, that is, money in a money market account, stock in an outside corporation, a rental home, etc. Talk to any adviser and they’ll tell you not to put all of your eggs in one basket; you have to diversify. When considering your investments, typically we consider all options. The same is true for business; don’t just start cutting costs or leave critical positions unfilled because of fear that the recession is coming – consider all your options and look for the opportunities out there.
Think about this for a minute when the market starts to tank, some investors panic and start selling off their stock only to find days later if they rode it out a little while their investment would have bounced back.
Does this always happen? No, but typically with any market or business there are the ups and downs. You have to use the ups to be prepared for the downs so you can ride the waves.
Instead of letting the fear create panic and mistakes, make it push you forward, but take time to think it through. Normally when you act out of fear or panic, you become resistant to risk. Before you know it a wall builds up because with resistance to risk comes lost opportunities, or should I say increased opportunity costs.
You want to work on scaling your business so that you never have to act out of survival mode.
If you want a Company Health Check that gets to the root of your company’s current pulse, including opportunities, strengths and weaknesses, contact us now https://bit.ly/2KGNUci.