Staying Stable in a Fluctuating Economy

In a shifting business world, taking risks is an inherent part of managing a business. Managing a growing company is often similar to the way one manages their own financial portfolio. It has some speculative areas where the payback can be high and then there are also the areas where one must make more conservative decisions. Generally we have one or two initiatives which have more risk because they involve offering new services, either organically or inorganically.

When a company is going through a period of high growth, its important for the executive team to keep a very close eye on cash flow. A company can allow for more investments if the growth can be sustained for several quarters . Its vital to stay relatively stable, however, since economic turns come on quickly.

Conversely, when tough times are encroaching on a company, its important to keep a very close watch on expenses, especially head count and other discretionary spending. These are the times when getting into details can have a greater impact than in normal times.