NYT: Three Things to Watch as We Play Out ‘09

By Jay Goltz

The year is half over. The question is, Is the recession half over? More than half over? Less? I sense that most “experts” believe next year will be better. Let’s go with that.

As a small-business owner, I think it is a good time to pause, reflect and take inventory. First of all, if you are still in business, take a deep breath. We have probably survived the worst of the economic collapse. (If you’re not still in business, that’s a very different story. I’ll have more to say about the pain of failure in another post.)

Most companies have made some staff and salary reductions, cut expenses and reduced inventories. These actions will reduce or eliminate losses. Breaking even is the new profitable!
Here are three things I’m focusing on as I navigate the second half of the year and look forward to next year (I am sooo done with ’09):

1) Cash flow. In many cases, cash flow is more important than profits. Many people do not understand that companies go broke because they run out of cash, not because they are unprofitable.

I have a lot of inventory. While my managers are always working on getting rid of items that have been around too long, I have made it a top priority. It helps to have a chief financial officer who loves to remind everyone that we are always talking about reducing inventory but not always doing it. If this were your nagging mother, it would be unbearable. When it comes from a C.F.O., however, it is called doing your job. (more)