Monday, December 5, 2016

Good Times, Bad Times (Tradecraft)

Asking introspective business questions is the hobby of good economic times. Where is my industry heading? What is the future of retail? How do I buy out my competitors or open new stores? Why does Amazon seem hell bent on removing humans from all elements of their business? There is clearly a lot of extra processing capacity in your brain if you're asking the big questions. You are clearly not on the brink of failure. This is fine, but realize you're doing it when it's happening.

Big business asks these questions too, and it usually results in bad decisions, like mergers and acquisitions (the majority are losers) or building an extravagant headquarters, or the hallmark of too much money, designing a self driving car. Idle big businesses with their problems sorted and too much cash, tend to act poorly. It wouldn't be unreasonable for investors to ask for that money before the stupid happens. It's like taxes. if you can't figure out a good use for that money, give it back to the people.

Bad times are where it's at. Oh man is it easy to focus with three days of cash flow and the rent nearly due. Day to day survival focuses your mind on business fundamentals, pleasing customers, mentoring employees, moving product. There is dangerous short term thinking too, but for now it's about survival. Bad times are when you're carefully tracking your finances, building cash flow models, finally figuring out how to create that Open to Buy spreadsheet. I'm so content in bad times I'll sometimes take extra risks in good times because I enjoy the rush. That's not good.

What if you could trick yourself into a "bad times" mentality while prospering in good times? Assuming you're not killing yourself with stress, wouldn't that be useful? There's probably an unpublished book there somewhere, "The Seven Bad Times Small Business Habits for Good Times." This is from the "those who know, do not speak" camp of business owners, the successful ones with their noses to the grindstone, even when times are great. I don't know their names, they're too busy to socialize. However, I would buy their book, if they weren't too busy to write it.

No comments:

Post a Comment