Cover Story
Untitled Page
The entrepreneur's toolbox, continued ...Published: January 01, 2010
4. Horde your cash.
Brenden of Home Run Media says not watching his available capital was one of the mistakes he made during the recession years.
“I
wish I had paid more attention to the cash flow,” he says. “You simply
must have more capital on hand to be prepared for any changes in the
economy. You need to horde your cash.”
He predicts that this is part of the new conservatism that will take over businesses in the improved economy.
“I think companies have learned their lessons from the recession,” he says. “They will be more conservative about spending.”
Cash on hand is especially important if the banks are more likely to restrict their loans to you, Puri adds.
For
example, he says, during the “old normal,” credit money versus real
company dollars was about 3 to 1. But during the fast expansion of the
1990s, that number catapulted to nine or more credit dollars for every
actual company dollar. That will shrink back to the old normal, if not
lower, he says.
“Companies got used to living on credit,”
he says. “But no more. If they don’t adjust with their own capital,
they’ll be in trouble.”
THE ENTREPRENEUR'S TOOLBOX
1. Learn to live with tighter credit – permanently.
2. Be aggressive.
3. Forget annual reviews.
4. Horde your cash.
5. Develop "what if?" business strategies.
6. Re-think personnel,
both at the hiring and the management strategies.
7. Don't fear investing – but change
your investment strategy.
8. Insist on dramatically improved customer service.
9. Narrow the economic picture to your field.
10. Think globally, not locally.
<<< BACK TO MAIN TOOLBOX PAGE
| The entrepreneur's toolbox, continued ...Published: January 01, 2010 |
4. Horde your cash.
Brenden of Home Run Media says not watching his available capital was one of the mistakes he made during the recession years.
“I wish I had paid more attention to the cash flow,” he says. “You simply must have more capital on hand to be prepared for any changes in the economy. You need to horde your cash.”
He predicts that this is part of the new conservatism that will take over businesses in the improved economy.
“I think companies have learned their lessons from the recession,” he says. “They will be more conservative about spending.”
Cash on hand is especially important if the banks are more likely to restrict their loans to you, Puri adds.
For example, he says, during the “old normal,” credit money versus real company dollars was about 3 to 1. But during the fast expansion of the 1990s, that number catapulted to nine or more credit dollars for every actual company dollar. That will shrink back to the old normal, if not lower, he says.
“Companies got used to living on credit,” he says. “But no more. If they don’t adjust with their own capital, they’ll be in trouble.”
THE ENTREPRENEUR'S TOOLBOX
1. Learn to live with tighter credit – permanently.
2. Be aggressive.
3. Forget annual reviews.
4. Horde your cash.
5. Develop "what if?" business strategies.
6. Re-think personnel,
both at the hiring and the management strategies.
7. Don't fear investing – but change
your investment strategy.
8. Insist on dramatically improved customer service.
9. Narrow the economic picture to your field.
10. Think globally, not locally.
<<< BACK TO MAIN TOOLBOX PAGE
1. Learn to live with tighter credit – permanently.
2. Be aggressive.
3. Forget annual reviews.
4. Horde your cash.
5. Develop "what if?" business strategies.
6. Re-think personnel,
both at the hiring and the management strategies.
7. Don't fear investing – but change
your investment strategy.
8. Insist on dramatically improved customer service.
9. Narrow the economic picture to your field.
10. Think globally, not locally.
<<< BACK TO MAIN TOOLBOX PAGE
