It is no secret that we live in a society with a fast-moving, ever-evolving economy in the United States. As a business owner, you are likely aware of how that makes you prone to more threats and risks in operating your day-to-day company and sometimes even your success in its entirety. Managing your businesses day-to-day operations
is usually enough chaos for most business owners, but unfortunately that isn’t a reality for most people as you also must endure the day-to-day chaos of the changes in the United States economy. Whether it’s inflation, tariffs, or even foreign conflict, there is a chance it ends up affecting your business due to the large ripple effects often seen in the economy. When you begin to view your decisions regarding your business from this lens, it becomes much clearer just how valuable time, decision-making, and speed are. At a time where consumer demand is changing more rapidly than ever, it is important to not only be on track but ahead of the curve. While patience is often a virtue, it can also be costly and harmful when you consider opportunity windows and competition, inventory and its turnover ratio, the financial implications, and more things of that nature that are part of running a business. This can come at a steep price depending on your line of work and has the potential to be more damaging than taking whatever chance you were considering.
Decisiveness, speed, and thoroughness cannot be a luxury; they have to be a part of your strategy. Due to the nature of the economy and the way it moves, speed can be the difference between growth and stagnation. An unfortunate reality of today’s marketplace is that opportunity windows are shorter than ever. Some opportunities that used to last weeks or even months are oftentimes only lasting hours or sometimes days in today’s world. This is true for many lines of work, but especially true for many that rely on contracts that are acquired through competition. As most business owners are aware, contracts go to the first business that says yes as long as they have the capital. Chances are that this could become a compounding issue because if you wait too long to try and secure a contract, not only have you missed out, but one of your competitors has now gained another potential advantage over you. In competitive lines of work there are always some that are accelerating or looking at doing things differently than you and the rest of the crowd, whether it’s equipment upgrades, capturing market share, hiring new talent, or even potentially trying out more creative outlets. Waiting around to make any sort of decision can be the difference as being outpaced also compounds. When you see your business market share begin to shrink or fall behind on innovation, you will find yourself becoming more reactive instead of proactive.
The same can be said about incorporating your strategy with speed in more passive businesses that are more reliant on their inventory and existing products or services. One key detail to remember is that inventory is not just your stock; its revenue waiting to be generated. Inventory delays are one of the most common, and costly forms of hesitation. Your businesses inventory turnover ratio (ITR) is likely one of the metrics used in several different aspects of your operations and strategizing. This is one of the reasons being hesitant or undercapitalized is going to have a larger impact beyond the calculated cost of waiting on inventory. Considering many suppliers are willing to offer a discount when buying in larger amounts, it emphasizes the
importance of urgency. By the time you’ve made your decision or waited for the exact right amount of liquidity, one of your competitors may have already been able to beat you to the punch and those customers will have no reason to explore anywhere else if they’re satisfied with the competitors’ price. At that point, not only are you missing out on sales, but you may also lose customers who may never return. In addition, if your business has potential to thrive within a certain seasonal or cyclical window, avoiding any unnecessary hesitation is paramount. These windows don’t reopen, which is why it’s so vital to prioritize acquiring sufficient working capital beforehand so that you can make a fully informed decision as quickly as possible without having to worry about when you will be able to or how you can make it happen.
Lastly, there are other financial implications that should be considered regarding indecisiveness and decision making. One obvious issue, especially on larger decisions that can span months or even years, is how inflation punishes waiting. With constantly rising prices in this country, waiting can quite literally cost you money in some instances. Additionally, cash flow gaps create vulnerability, which is a potential problem that may make you more fragile than stable. If you choose to wait on any decision, you could be opening yourself up to even more risk if an unexpected expense arises, and you may find yourself in another difficult bind. An unfortunate truth is that these are all just the costs of slowed down decision making in a real-time economy. Riding out certain things (or waiting to make a decision) might seem like it makes sense, until suddenly there is an unexpected 10 percent tariff placed on the country you acquire goods from. There is so much information and general unpredictability out there that the longer you wait to make a move the more detrimental it could be. Markets react almost instantly to information that is put out, you should as well.
With all this being said, this is by no means encouraging business owners to make uninformed or poor decisions for the sake of saving time. This is merely a reminder of the reality of trying to run your own business and the tough decisions you’ll be forced into making over time. It should serve as a reminder that there are ways to help put yourself in a well-prepared position to succeed and be making timely, well-informed decisions.
One decision that could be beneficial is securing additional working capital. If you feel your business could use some additional funds, consider reaching out to Penhurst Capital. Penhurst understands that running a business is tough and that most business owners do not have time to wait around. Which is why Penhurst does what they do, which is helping small and medium sized businesses secure much needed financing solutions (including term loans, cash advances, lines of credit and even equipment financing solutions, among others) very quickly (as most sources in their network are capable of distributing funds within 24-48 hours of applying).
