It is no secret that the U.S. economy is tightening and the months ahead may be leaner than the months that have passed. As I travel from one formula manufacturing facility to another and meet with owners, managers, and line workers, I have gained a few insights that I would like to share with you.
If you are over 40 years of age you have now experienced at least one economic pull back and at least one economic expansion in the manufacturing sector. If you are over 50, you have probably experienced more than one. One fact remains true: The U.S. economy will change and eventually it will be stronger than it is today. With this change, we will be faced with different challenges than we have in front of us now. The key is to ride out the down times while preparing for the next wave. The most successful companies are able to manage down times while they retool for the expansions.
How do you do that?
The key to a down market is cash flow and liquid working capital. In other words, find ways to increase the cash flow and increase working capital. But don’t do that at the expense of your future. Don’t get caught flat-footed when the market begins to come back. Your competition is hoping you will do just that.
Below are some ways to squeeze out working capital while investing in the future. It is all centered on cash. If you can watch the cash and working capital, you will find you have plenty to make it through the slow times and will be in a position to compete as the market comes back around.
All of these items are very manageable. The key is to get started. The sooner you look into managing cash flow and working capital, the easier any economic downturn will become. Additionally, don’t trade long-term successes for short-term benefits. This economy will be back stronger than ever. Many companies make it through slow times only to be crushed as the business returns.
If your existing systems are not delivering the data I outlined above, you need to do the best with what you have and address your systems issues immediately. I can guarantee that having the right information will pay for itself many times over in a shrinking or a growing economy. Putting this data at your fingertips is not as expensive as you may be led to believe. The primary message is to get started today and if you need help ask for it. There are some real challenges ahead of you, but each can be addressed with creative thinking and access to accurate data.
For more info, read our subsequent blog: Decision Time: Wait It Out or Retool Now