Recession-Proof (CONT’D FROM PAGE 1)
the revenue side, a decline in receipts means less cash to cover expenses. From the cost side, increasing prices are punching up operating expenses. “Over the past six months or so we have seen a rise in the cost of materials and delays in construction and customer payments,” said Josef Roberts, Founder of E Squared Consulting, Atlanta. “Distributors and dealers are buying materials that are much more expensive than before. And delayed receipts are exerting their own pres- sures. The result is a cash squeeze.” For businesses, this unusual dynamic has created a treacherous operating terrain. “A recession is much more dangerous when it is combined with inflation, since prices are going up at the same time that revenues are coming down,” said Oded Koenigsberg, Deputy Dean at the Lon- don Business School. Turn Inward Consultants advise one course of action that will almost certainly pay off: Casting a bright light on internal opera- tions. “Now is the time to get under the hood and examine the individual components of a business,” said Travis W. Harms, President of Mercer Capital. “Inefficiencies have almost certainly arisen during the post-pandemic boom. When times are good, managers tend to focus externally on generating revenues and delivering on obligations. It's
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March 13, 2023
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