Glory Days? An economic boom isn't always a boon for entrepreneurs.
Opinions expressed by Entrepreneur contributors are their own.
You've heard the saying: In life, there are no guarantees.So consider this: Although the economy is flourishing andunemployment rates are down, and despite the fact that countlessbusinesses are doing better than ever, continued prosperity is nota sure thing.
Experts insist it's actually quite a challenge to survive ina booming economy, when entrepreneurs are being seduced by the goodtimes, says John Keough of management consulting firm George S. MayInternational Co. in Park Ridge, Illinois. "They expect thosetimes will last forever," he says, "and make longer-rangecommitments based on extraordinarily good times, [a strategy] that,in a downturn, could be very difficult [for thebusiness]."
But entrepreneurs privy to the unwelcome effects of a falsesense of security have resolved to protect their ventures."It's more difficult [to operate the business] during goodtimes," says Rick Maguire, owner of Fortier Inc. in Conway,Arkansas. "One reason is you're busier, and you tend tomake more mistakes." He knows firsthand about rapid growth:Four years ago, his business, which sells walk-in coolers, drinkdispensers and other equipment found in convenience stores, pulledin $4 million in sales. Today, that figure's reached astaggering $14 million, with $19 million projected by year-end.
Sure, business is booming. But that hasn't stopped Maguirefrom taking precautionary measures, such as expandingcarefully.
"In good times, just like in times that aren't quite asgood, you have to [pay attention to] the details," Keoughsays. So invest your extra dollars in research and development, anddon't overstock your inventory. And never extend greater timelimits to customers for the payment of receivables. "If youdon't [require] customers to pay you back promptly inaccordance with your terms, you're training them to disregardthose terms," Keough notes. "You're breaking one ofthe basic control systems in your business. And you're notgetting the cash."
Perhaps most important, look ever-forward. Says Keough,"You must always anticipate. You must always be working in thefuture."
Contact Source
Fortier Inc., P.O. Box 1418, Conway, AK 72033, (501)329-6309
George S. May International Co., http://www.georgesmay.com
