Not all companies were able to weather the destructive nature of economic tsunami. Unfortunately, I spoke to a few founder/CEOs that just ran out of market demand, time and/or money. One firm addressing the needs of the new home construction market immediately became a skeleton staff of one in very quick order. The technology, customer value proposition, and competitive spirits remained intact but without positive cash flow there is no viable business, and has elected to try and wait for the market to return. Another firm in the same sector was a little more fortunate, or should I say had better foresight and when the tough times hit, they turned their attention to acquisitions as a means to help weather the storm, to effectively restructure and diversify the business. Sales and cash flow still remain major issues, especially in the construction market sector which was the hardest hit, but the CEOs vision and determination to overcome and succeed was a major force in moving the company forward. Not to mention a strong balance sheet. Both CEOs commented that they saw no trickling down effect of monies promised from the current administration's trillion dollar stimulus package. Bottom line: a rainy day fund is a cornerstone strategy of successful businesses.
I invite you to join me at the upcoming Merge Briefing on Sept. 23 in Salt Lake City or Sept. 24 in Denver. Click here to register.