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PKF Texas – The Entrepreneur’s Playbook™:Wisdom in an Economic Downturn

by | Jan 2, 2009 | PKF Texas - The Entrepreneur's Playbook®

Note: Running Fridays in FromGregsHead.comis a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur’s Playbook page of the PKF Texas website.

We read about it every day, we hear about it on the news.  We are in the middle of a worldwide economic downtown.  For many folks in the business world, this is their first time to weather the storm and they are scared about what the future may hold.  So what conventional wisdom can we offer to those who don’t know what to do?

First, it’s important to understand the nature of your business and what its daily cash requirements are.  Make sure you have developed an effective cash flow budget that can be used for forecasting your future needs.  If you don’t know what you daily cash requirements are, you won’t be able to effective weather the storm.

Second, develop operational and financial budget scenarios that are realistic and provide a wide range of spectrums for you to react to.  This includes worst case, moderate case, or best case in projecting your business’ operations.

And thirdly, while you may have excellent or outstanding relationships with your banker, it’s always a good idea to meet other bankers, because you don’t want to go looking for a banker in a crisis.  You want to have already established a relationship with someone who knows your company in advance.

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