![]() ![]() So, if you haven’t already, take the time to develop a set of leading indicators that will help you predict future revenue and future trouble spots. Investing behind the curve is a crucial part of preparing your business for an economic downturn, but to do it effectively, you must know your KPIs. Based on your KPIs, how strong do you expect your next quarter to be? By considering past performance and leading indicators, you can determine what investments you need to make to service revenue in your backlogs. At the end of each quarter, review your company’s performance. That’s what the companies whose boards I sit on have done, and it’s what I suggest others do, too. Right now, the smart move is to pull your investments out of your budget and put them aside. When times are uncertain, though, I've found it’s the wrong approach to take. They assume a certain amount of growth, and so they pour capital into things like people and equipment in order to service the expected increase in their revenue streams. When the economy is on an upswing, businesses often make investments at the beginning of each quarter. ![]() What do I mean by that? Simple: Hoard your cash and reduce your expenses as much as possible, and only make investments at the end of each quarter after you know how well your business performed. ![]() So, along with evaluating your financial institution, I also suggest beginning investing “behind the curve.” Invest behind the curve.Īs the recent bank failures demonstrate, parts of the economy are sinking rapidly-and the chances for a broader slowdown are high. On top of that, working with a bank that can service all your needs as you expand makes it much easier (and often less expensive) to do business in different markets over the long term. After all, I've noticed that banks that meet these criteria often handle economic downturns better than banks that don’t. If your current institution falls short in any of these areas, it may be time to seek a different one. ![]()
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