How Business Owners Can Avoid the Next Liquidity Trap

If you survived the economic tsunami of the last 36 months, you know that not everyone lost their house, but everyone got wet, and some came out soaked to the bone. John Keynes, the influential British economist, once said “the market can stayirrational longer than you can stay solvent.”

Many entrepreneurs found their businesses on the edge of survival; it could go either way. The economic crisis forced entrepreneurs to re-evaluate everything — payroll, employee performance, management, reporting structure, costs, product or service mix, competition, and what the real market opportunities were going forward. These evaluations, changes, and decisions had to be made as revenue fell, cash flow was compromised, and bank lending, as well as personal resources, rapidly diminished.

This article appeared in the New York Enterprise in February 2011.