Financial advisors are currently up in arms. Some argue that we’ve already entered a bear market, while others say we’re not quite there yet, and a few even claim that we’re already on the way out. Regardless of the arguments posed by our friends in finance, it’s crucial that your business is prepared for a potential market downtrend. We can take a few lessons from past bear markets to develop an effective strategy for your business to come out safe on the other side.
Time to Get Lean
Bear markets can certainly provide a stressful environment, but they also provide an opportunity for your business to step back and evaluate its processes. Just like the hibernating bear, your company should take this time to recuperate. Start by looking internally at processes, and determining where there are significant bottlenecks that generate unnecessary costs or slow down your operations. Your business can burn off that fat by creating newer, more efficient systems that result in lower costs and faster results.
The first step in evaluating and optimizing your business processes is to take a step back and view the big picture. Prioritize optimizing systems that flat out aren’t working; after that, systems that work, but not as well as you’d like; and finally, see how you can improve your best practices to become even better. Bear markets will stress your revenue, so the end goal is to improve efficiency in order to keep costs down, while still maintaining or increasing your output to make up for the downtrend.
A Time for Value Investors
Depending on your views on investment, a bear market is either a strong opportunity or a massive detriment. To value investors, a strategy popularized by Warren Buffet, bear markets provide a great opportunity to invest – businesses are on sale, and those with good fundamentals and value behind them should (in theory) rebound back from a rough market. In recent years, however, value investors have become a much rarer breed, and investments are based much more heavily on predicted value and growth over a shorter period.
Those doubting value investors may have a point. Volatility in recent years has been consistently higher day-to-day, so investors are understandably concerned about the recent murmurs of a bear market arrival. With such increased volatility and the addition of cryptocurrencies which have a big influence on the market, many investors simply aren’t confident in a strong recovery – or at least one that’s coming anytime soon. Depending on your sentiment, this is either a time to hunker down and re-evaluate your game plan or take action on some advantageous deals.
Doida Crow Legal is here to help your business with its legal needs. If you’re making changes in preparation for a downturn that require legal assistance, give us a call to schedule a consultation at (720) 306-1001 or by emailing info@doidacrow.com.