Everyone is gloomy. So should we expand?
Thursday, May 28, 2009/
Hey Aunty B,
We are a small business which has built and grown solidly over the last two years. There are only a couple of us involved in the business but the last six months have been going well financially and we have been very diligent to save up some cash reserves.
One thing we are worried about is staying still. But all of the negativity about the market has made us worried about any new purchases.
Our production capacity is being met and we are starting to see an opportunity to purchase some secondhand machinery at much lower prices (even though it still costs more than an average house), but will bring our production capacity up 20-fold with a heavy reduction in costs.
So is this the time to be thinking about making such an upgrade? Or should we be hesitant and consolidate, waiting for the market to fully rebound before making such a leap?
Your timing is perfect. You obviously have a good value proposition as you have grown solidly during your first two years, which are by far the most difficult.
You have built cash reserves and in particular you have done well in the last six months. The time could not be better for you to purchase the equipment, especially as you can clearly see the benefits from such a purchase.
This is the perfect time to be thinking about such an upgrade. This is the time to make the leap. One of the things that separates entrepreneurs from small business people is that they are countercyclical. They see opportunities when everyone else sees gloom. And that is why they can be far more successful.
And don’t forget, timing is critically important. You will be emerging from this downturn with a stronger value proposition, greater efficiency and better prices.
Go for it!
Your Aunty B
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