Spend to Survive

When times are tough, smart business owners and management invest into their businesses to ensure its survival. This approach can be summarized by the mantra, "Spend to Survive. Survive now, to thrive later."  The underlying philosophy is that during times of economic hardship or uncertainty, those who are fearful have a tendency to both retreat and adopt to ration resources, along with cutting back and hiding to weather the storm. 

This strategy poses significant risks. When businesses take a conservative approach, they run the risk of depleting their assets and reserves over time. This is because in an effort to reduce costs, they may cut back on essential investments, lay off key personnel, or reduce optimization efforts. If the downturn is prolonged, and businesses cannot sustain its operations due to inadequate resources, or efforts, this cycle of depleted resources and no attempted solutions leads to business failure and death. Even if a business manages to survive a prolonged downturn by conserving resources in the short term, in the long term they make it through only to fail and die having no ability to rebuild and restart; without having taken optimal efforts during a downturn, a business may find itself struggling to rise up even when economic conditions improve.  

When cornered, survivors fight. Individuals or businesses with a survivor's mentality are more likely to take proactive and strategic actions. When faced with adversity, they do not merely passively endure but actively seek ways to adapt, overcome, and emerge stronger. In business, this means strategically utilizing resources to ensure survival. Businesses should carefully assess their available resources and use them in a calculated and meaningful manner. It's not just about spending money but also about making informed decisions on how to effectively utilize available resources.  Spend to Survive. This means capitalizing on opportunities to grow, capturing more resources to survive the downturn, and in doing so positioning the enterprise to not merely survive, but thrive in the upswing. 

Economic downturns often create unique opportunities in the market, including acquiring distressed assets or companies at reduced prices. This can allow simultaneously gaining market share and eliminating competition by acquiring competitors who are cowering, and doing so at a discount. It means increasing revenue and market share by forming new business partnerships, divisions, and actively marketing. Given the downturn, this can often be at discounted rates. These partnerships can take various forms, such as joint ventures, collaborations, or alliances thus allowing businesses to combine their resources, expertise, and customer bases to create alliances that benefit both parties. The ultimate objective is to boost revenue and enhance cash flow because in challenging times, liquidity is paramount. The more cash a business can maintain, the higher its chances of weathering the storm and emerging in a stronger position to thrive when the downturn subsides. To do this, you have to spend. Spend to Survive.