Eight Questions: Preparing Your Business for a Softening Economy
November 01, 2019
By John Simons, Corporate Fuel Advisors
Let’s take a look at where we are from an economic standpoint. Currently, we’re experiencing the longest economic expansion since WWII. Yet, as is the nature of things, at some point the economy will soften, and we’ll have to weather the inevitable downturn. Already, economic growth in major regional economies around the world is slowing, our trade disputes with China and Europe are creating uncertainty, and manufacturing activity and business investment has slowed in recent months. Locally, the cost of labor (considering a move toward the $15 minimum wage, as well as the high property taxes our work force has to handle) is a concern.
Now is the time to consider strategies and plan for the when the cycle pulls us into a downturn.
Are you part of any benchmarking? Do you have access to knowledge that can help you understand competitive market dynamics?
Is your current business model stable? Sustainable?
Are you strengthening your management information and enterprise reporting solutions, to increase the accuracy and immediacy of financial information available and enhance decision-making?
Are there any specific downside scenarios you’re modeling?
Are you still seeking growth?
Do you have strategies in place to communicate any planned changes to your employees?
Are you increasing leverage and relying more on debt? Do you have multi-year credit facilities in place?
If you’re considering an acquisition or other major transaction, how are you building the transaction structure?