The Sky’s Falling
By Dick Olenych, Inside Business - Hampton Roads - 7/14/2008
Let’s keep our heads about us. The sky isn’t falling. Yeah, there is some space debris we need to dodge. But it ain’t the sky. Could it be Skylab again? No it couldn’t be, we’ve already lived through that fiasco.
Yes, the economy is not as good as it was, but now is not the time to over react. To survive we must be prudent.
I believe that in a few months (no I don’t have a crystal ball) it will be a great time to expand. As others in your market space falter, it will be the right time to grab a little piece of their pie.
Hunker down keep cash flow liquid. Tighten your belt and wait for the worse of the storm to pass. Those of us that survive will have greater opportunities than ever before.
Let’s backtrack just for a second though, why are we in this mess? Could it be the elections? Maybe…I’m not a politician, but I don’t think so. Could it be the price of gas? Maybe … I think that it has some effect, but it is not the crux of the issue.
Could it be greed gone bad? Now there’s a thought.
Let’s mortgage the farm on the chance of making some easy money on this wonderful elixir we call appreciation. Give me twenty cases of it while I put gan’ma in the field until we sell. It’s easy money, right?
Some people have overextended themselves. They didn’t appreciate the fact that sometimes property values depreciate. Or that variable interest rate can go up and up and up. And eventually they can go through the roof of your investment.
It happened twenty odd years ago in the 80’s with the S & L problems. At one point Virginia Beach was THE fastest growing city in the nation. I got caught up in it and bought property on the assumption that it was going to increase. What could go wrong? My assumed interest rate on some rentals was only 18%, but property was increasing at over 30%.
It sounded good on paper.
But, then everything went wrong. Property values didn’t increase. My negative cash flow was gushing. I tried to refinance, but my loan to equity ratio wasn’t high enough. It was a mess.
The dollar was weak and it was “doom and gloom” everywhere. We, the United States attempted to restrict foreign investment by trying to pass legislation limiting the sale of landmarks like Rockefeller Center in New York.
Guess what? We weathered that hurricane of despair then. AND we will rise above this climatic event. Just make sure you keep your friends close and your competitors closer because there may be some hidden opportunities.
If you are fluid. Your vendors will love you because you are one of the few paying on time. Ask these same vendors for early payment discounts. They may jump on the chance. Now may be the opportune time to negotiate your best terms. You never know.
If you are fluid. Your marketing will garnish more attention. Go after it! Get visibility, win customers and love on those customers. Be crazy when everyone else is sane. Ask me why I hope the price of gas hits $6.00 a gallon? Did you know that the internet’s a fad?
If you are fluid. Prepare for the unexpected. There may a customer base or more available in the near future. Deals have a wonderful way of maturing.
Don’t be Chicken Little. Be bold in a time of change especially if you’ve been to this dance before.
Dick Olenych is the President of Spectrum Printing and the author of the internationally acclaimed book Joe Sails. He can be reached at firstname.lastname@example.org.