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When times are good, it's easy for companies large and small to overlook little problems and ignore early signs of trouble, because...well, times are good and the pressure to act isn't strong.

During periods of great prosperity, the seeds of future problems may well be sown, to bear bitter fruit when the economy cycles into a downturn.

Effective business owners and managers observe sound management practices during both good times and bad. Following six basic rules can keep your business on track and help you maintain your success, no matter which way the economic winds may blow.

Rule #1
Stay focused on your mission. Use the present prosperity to strengthen your core business and don't be tempted to start wandering off on tangents.

I know of a successful hardware store that decided to expand its inventory by adding a line of rental items. Unfortunately, they failed to consider that several businesses in the area already had the rental market well covered.

Instead of boosting their business, the hardware store has tied up cash in unproductive rental inventory that actually competes with possible sales of new equipment. For now, their strong sales volume and profits are covering the rental shortfall, but in a downturn the added overhead expense could become a millstone around their necks.

Don't let prosperity blur your focus. Keep your eye steadfast on your purpose. As the apostle Paul wrote, "I run in such a way, as not without aim" (1 Cor. 9:26 NASB).

Rule #2
Hold your staff accountable for performance. Be careful not to allow the current good times to draw your attention away from expecting excellence and productivity.

A travel agency hired a new sales agent 18 months ago to sell cruises and develop an expanded clientele for the company. But, so far, the salesperson has failed to develop enough additional business to meet expenses, and he has never achieved the expected sales volume. Because the overall business is going strong, the owner continues to tolerate a lack of productivity from his new employee.

In a downturn, the agent would likely be let go quickly due to financial necessity. However, if he were more productive now, the business would be able to build up its retained earnings and increase its financial strength. And adding to their client base would enhance the stability of the agency and increase its chances of surviving a slowdown in the travel industry.

Rule #3
Recognize that people are your most important asset. Good employees are hard to find, and even harder to keep, especially when a strong economy creates new jobs and greater opportunities.

Keep your compensation competitive and develop a flexible benefits program to motivate and retain staff. If you treat all your workers with respect and shower them with praise and encouragement, you will build loyalty and commitment.

During the tough times, that loyalty will pay off as your strongest performers shoulder the weight of responsibility. In an economic downturn, you will need good employees more than ever.

Rule #4
Maintain good communication with your staff and your boss at all times. When business slows, information must move quickly and effectively throughout the company. Employees need to understand the pressures and realities facing the business.

If improvement is needed, mincing words won't help. Be direct. Good communication is difficult to develop overnight, especially when times are tough. Start now to develop trust and establish lines of communication. Keep good and reliable information flowing.

When Nehemiah was working to rebuild the walls of Jerusalem, the enemies of Israel came and taunted the workers, seeking to discourage them from completing the task.

Nehemiah responded by rallying the people and encouraging them to trust in God and keep working. He said, "Do not be afraid of them; remember the Lord who is great and awesome, and fight for your families and your houses" (Neh. 4:14). The people listened and responded, and the city was rebuilt and restored.

Rule #5
Watch your budget and debt load. Heed the words of James 4:14, "yet you do not know what your life will be like tomorrow," and maintain a balanced perspective. Business cycles ebb and flow, fortunes rise and fall, and sales are good and not so good.

Anytime you plan a budget or accumulate debt based on optimistic projections and a booming economy, you may be headed for a fall when the economy slows and interest rates rise.

Manage your finances wisely, and don't bite off more than you can chew. Keep your budget tight and set aside your excess cash in an asset fund, then use your cash reserves, not credit, to expand.

Rule #6
Know every aspect of your business well. Be proactive and don't wait for trouble before you take decisive action. When revenues slip and adjustments are needed, you won't have time to catch up on all the details before making decisions.

In today's rapidly changing marketplace, you must be in tune with the essential elements of your business if you want to continue to succeed.

When business took a downturn, the manager of a restaurant laid off his bookkeeper to reduce expenses. Unfortunately, the manager wasn't prepared to step in and fulfill the bookkeeper's duties. He struggled to close out daily cash and prepare the required reports.

Developing your knowledge of all elements of your business is key to managing in tough times. There is no substitute for preparation.

If you will implement these principles of sound business management right now, while times are good, when the inevitable slowdown hits - whether its six months from now, or six years - your leadership may be the difference between success and failure for your business.

This article is used by permission from Steve Marr's Business Proverbs.
Steve's passion is to empower ministry and business leaders
with God's ancient Wisdom for enhanced performance and
excellence. He resides in Tucson, Arizona with his family.

Author Biography

Steve Marr
Web site: The Life
Steve Marr has learned from 40 years of business experience that God's way works. As an author, speaker and business consultant, Marr helps companies and organizations apply the ancient wisdom of the Bible to avoid the common mistakes and headaches of growing a business.

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