Let’s face it, the Federal Reserve is an extremely complex bureaucracy which doesn’t seem to know where all the money is going. In recent years the Fed has shown a growing tendency to put in place policies that are detrimental to the average American.
If you don’t believe me, take a look at the large number of people out there who have lost their jobs and are now trying to make do with less than they used to make. In fact, one expert has said that over fifteen million Americans now find themselves in what he terms a ‘jobless recovery’.
There is a large number of people out there who are not even making the minimum wage.
It appears that the problem is, we have a government that is run by and for the mega-rich. The government gets billions in taxpayer funded loans every year and then spends that money on useless programs that are highly ineffective.
You can see where this is headed when you see these ‘central planners’ righteously squawking about inflation, about rising gas prices, and about high food prices. But, there are more important things to worry about than these phony issues. It seems like many people are not only ignored by the big government but by those they try to help.
For example, how many of you read your newspaper and think, ‘what is going on in the world?’ And then you turn the TV on and the news shows are full of ridiculous political statements and wild speculations? We have got to stop this nonsense, because it is affecting our economy.
If you own a small business, you know that most small businesses are on automatic pilot mode. That means that they are already setting up and closing their businesses without any thought about how they will do it. However, when it comes to a recession, your business will be going through all kinds of adjustments.
No matter how smart and well organized your small business may be, there is no way that you can avoid this transition period. If you want to maintain a profitable business, you must pay attention to how your business is doing in terms of cash flow.
You need to monitor how your business is doing with regard to cash flow.
Some businesses don’t allow you to take a look at their cash flow statement, but then again, there are other businesses that allow you to get a hold of a current cash flow statement. In either case, you need to see what is going on.
That cash flow statement will tell you how much cash your business is producing, how much inventory you have, and how much inventory is on order. It will also show you where your cash is going. This will help you determine how much money you need to get rid of.
You need to reinvest your cash flow.
One thing you should never do is to spend all of your cash and run.
When you receive your cash flow statement, be sure to use it as a guide, as it can be pretty misleading. Also, don’t ever go ahead and close your business until you have completed a cash flow analysis.
You need to understand that cash will always be needed, especially during a recession. So you need to look carefully at how your business is doing before you close it.