Where Should We start?

I apologize for the length of time since my last post – I’ve been so busy the time just slipped away before I knew it. A lot of my time lately has been spent working with people learning to adapt to a harsh new economic reality. Everyone seems to be saying pretty much the same thing – “Its been tough before, but NEVER like this….”

A quick review of their recent financials typically reveals operating losses, negative cashflows and messed-up balance sheets. That said, the first question out of everyone’s mouths when everything’s so messed up is “where should we start?” 

Now that’s a question I can answer – Always start by addressing cashflow issues first.

You can stay in business with operating losses but you can’t stay in business for long without cash flow. Just look at the airlines and car companies – they’ve incurred billions in losses over the years and they’re still in business. In the longer term, you have to have profits to survive but your business can definitely survive a period of operating losses.

The trick is to improve your business’ ability to survive these periods. That’ll be the subject of my next post.