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You've heard the saying: In life, there are no guarantees. So consider this: Although the economy is flourishing and unemployment rates are down, and despite the fact that countless businesses are doing better than ever, continued prosperity is not a sure thing.
Experts insist it's actually quite a challenge to survive in a booming economy, when entrepreneurs are being seduced by the good times, says John Keough of management consulting firm George S. May International Co. in Park Ridge, Illinois. "They expect those times will last forever," he says, "and make longer-range commitments based on extraordinarily good times, [a strategy] that, in a downturn, could be very difficult [for the business]."
But entrepreneurs privy to the unwelcome effects of a false sense of security have resolved to protect their ventures. "It's more difficult [to operate the business] during good times," says Rick Maguire, owner of Fortier Inc. in Conway, Arkansas. "One reason is you're busier, and you tend to make more mistakes." He knows firsthand about rapid growth: Four years ago, his business, which sells walk-in coolers, drink dispensers and other equipment found in convenience stores, pulled in $4 million in sales. Today, that figure's reached a staggering $14 million, with $19 million projected by year-end.
Sure, business is booming. But that hasn't stopped Maguire from taking precautionary measures, such as expanding carefully.
"In good times, just like in times that aren't quite as good, you have to [pay attention to] the details," Keough says. So invest your extra dollars in research and development, and don't overstock your inventory. And never extend greater time limits to customers for the payment of receivables. "If you don't [require] customers to pay you back promptly in accordance with your terms, you're training them to disregard those terms," Keough notes. "You're breaking one of the basic control systems in your business. And you're not getting the cash."
Perhaps most important, look ever-forward. Says Keough, "You must always anticipate. You must always be working in the future."
Fortier Inc., P.O. Box 1418, Conway, AK 72033, (501) 329-6309
George S. May International Co., http://www.georgesmay.com