How Can Downturns Be Managed Successfully

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The Answer is The first step is to recognize that the business is in or heading for trouble. An entrepreneur should be alert to the warning signs of a business in trouble. These signals include inadequate or negative cash flow, excess number of employees, unnecessary and cumbersome administrative procedures, fear of conflict and taking risks, tolerance of work incompetence, lack of a clear mission or goals, and ineffective or poor communication within the organization. While entrepreneurs may be able to recognize crises, they may be less able to recognize a slowly deteriorating situation.
Next, the entrepreneur should have a plan in place to deal with a business in trouble-before it happens, much like mapping exits from a burning home before the fire starts. The plan should focus on providing specific details for controlling the most fundamental and critical aspects of running the venture-cash flow, accounts receivable, costs, and debt. Other actions would involve identifying specific strategies for cutting costs and restructuring the venture.

How Can Downturns Be Managed Successfully

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