There have been few times in our history that have challenged business owners more than the economic uncertainty which prevailed in the latter half of 2008 and into 2009. They were arguably the worst years for the economy since the Great Depression. Banks folded, companies closed, and many jobs disappeared.
While the economy in 2012 is not back to its former strength, it has improved enough to consider companies that are still solvent to have “made it” through the storm. What actions allowed some companies to make it through these hard times while others failed? And how should these success stories impact businesses as they continue to operate in an uncertain economy?
For answers, I turned to the advice of several of my clients, who through dedication, determination, and tough choices, have managed to successfully lead their companies through the recession.
Do not overleverage. The first key is to efficiently manage the leverage of your business. Borrowers who levered up prior to 2008 faced much greater stress when economic uncertainty set in. This resulted in more limited options in the downturn and, in some cases, resulted in the distressed sale or liquidation of the business. In order to keep your business on track, seek the opinion of your banker and other professional advisors to determine what an appropriate leverage profile is for your business.
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Source: Chris Deisley, http://www.atlcapbank.com
