Posts Tagged ‘Anticipation’

• The Challenge That Is The Business Cycle

  Date: 2012.01.02 | Category: live feed | Response: 0

  Any business entrepreneur knows how important managing the business cycle is as well as making prudent decisions to ensure a well managed cycle.  On the average, the life cycle for business ownership is placed at anywhere between seven (7) to fourteen (14) years after which people or business owners move on.

  To meet the challenges brought by the business cycle and in consideration of Isaac Newton’s “what goes up must come down”, here are some strategies that you can employ in effectively handling your business cycle:

  •    You need to exercise anticipation and forecasting.  This is important so as not to get caught unaware of flat footed once the unexpected and unforeseen happens.  Consider the current economic crisis where many businesses have failed to prepare and therefore have suffered the consequences of their unpreparedness.  It is also important to note that in these times, businesses are interrelated and closely woven to one another that negative impacts spread far and wide.

  •    You also have to be ready to realign your capital overheads that are appropriate and suitable to your business needs and requirements.  When your business takes a slump, you will have to make a decision whether to cut back on your capital spending or increase it to gain the ‘first mover’ edge during the upturn.

  •    Know your inventory well and exercise wise decisions whether or not to cut back on your inventory or to add to it.  Not being able to meet customers’ demand during the upturn is as worse as being saddled with dormant inventory.

  •    Continue to promote your products and services notwithstanding the downturn or upturn of the cycle.  You have to condition yourself to look at advertising and promotion or marketing in general as an investment that will yield profitably in the long or short run, and not as an unnecessary expenditure especially during times of crisis or the downturn of the cycle.

  •    Consider the welfare of your human resources, which is of course, still the greatest asset of any business.  Economic crisis does not necessarily have to mean streamlining your human resources.  But if you find your business in the situation where downsize of your human resources is the only better alternative during the downturn of the cycle, then you have to make sure that you keep the goodwill of the people that may be affected of the move. You will also realize that the downturn can be a good opportunity to get the right people at the most suitable cost.

  When your business cycle reaches a downturn, don’t easily get disheartened as you can find opportunities just waiting to be tapped.  You just have to learn how to recognize these opportunities and make the most from them.  There are also valuable lessons you can learn and apply to ensure the stability of your business regardless whether the cycle reaches the downturn or upturn.  

  The business cycle is something that all businesses have to go through and it is no easy task to deal with.  However, with all the tools and resources available, you should be able to meet the challenges head on.