If demand and production match you have some peace in your business. Things are going smoothly and your problems are small.
But if demand (commitments) are higher and production isn’t keeping up, there is stress. You are trying to hire, buy machinery, expand or move your facility and it’s a challenge.
If your company is used to higher sales and now demand has fallen, there is stress there too. You are having trouble paying the bills, you have to downsize – people and physical resources and anything that costs money each month.
The first situation is growing. The second is responding to change. Years where there is equilibrium are the best.
What cycle is your business in now?
For me, I have battled four consecutive years of record breaking drought conditions. We have managed to grow an average of 22% year over year through that. The first two years of those droughts were really tough to navigate. But, now that we are somewhat used to it, we don’t count on in climate weather conditions like we used to. However, we’re optimistic and ready for the bad weather when it does come. Being able to adapt quickly has proved to serve us well in the business this year.
Larry, thanks for the book recommendation for 4,000 Weeks, I thought it was a great book with an interesting way of looking at the world and life. It lead me to read Stolen Focus by Johann Hari and that book is excellent, interesting, and a little scary as well. Thanks, Clark
My business was 2M and I was preparing for growth. Then this year we saw 30% drop in demand and each month we expected the next month to see the catch up. It never came and we are finishing in the red. I didn’t make adjustments fast enough and options are limited. Now rethinking how to approach next year. Watched break even SOE and contemplating.