How many times have you meet someone who had a successful business and was doing well only to run into them a year for so later and they are about to go out of business? What happened!
These business owners have failed to learn a valuable lesson that my mentor preached to me over and over; put money away when times are good because times are not always going to be good! This principal has saved me more than once!
Economic conditions are like the waves of the ocean; sometimes your and sometimes your down! So before you increase your salary or expand your business make sure you have an emergency fund that will operate the business without any sales for at least three months.
Some recent examples of times changing quickly and catching people of guard are:
- The real estate and banking crash of 2008
- The oil price dropping by 60% this year, which lower fuel prices are good for the economy but many people in the oil industry spent and borrowed like oil would stay at $100 a barrel for ever.
Learn from others and maybe even the pain you have gone through and prepare for bad times because no matter what industry your are in; bad times come like the waves of the ocean but if you ride that wave good times are right behind it!