People say, “A rising tide lifts all ships.” Except, of course, for the ones that have sunk! As the recovery kicks in the companies that have gone under will not be coming back.
Many recent business failures I’ve seen are due to other issues that are exacerbated by a downturn in sales, even though the sales decline was not enough to knock them out.
• They expanded too much in recent years, then with business downturn they could not sustain their high overhead, even though sales still seemed pretty good.
• The owner/founder is nearing retirement and decides it’s just not worth the hassle to continue, and closes the doors.
• Poor management and administrative practices that worked okay during good times became much more apparent during bad times.
• Partners have a falling out, partly over needed tough money decisions.
• During boom times, companies took any project that came along, and never developed a strategic focus. In down times, lacking this clear image in customers’ minds makes their marketing task much more difficult.
