HOLY $H!T FUND for the what if$ in business

Over the last two full decades and going on three decades of entrepreneurship trailblazing I`ve learned that predicting the future will always be impossible. That's why it is always “good business” to consistently contribute to what I've coined the “HOLY $H!T FUND”.  This not only allows me to sleep better at night, it gives our team and I the option to go on the offensive when an opportunity presents itself.  This becomes even more critical during a period of inflation, rising interest rates and market volatility.

This fund is not necessarily a determined cash amount that you set aside for a rainy day.  It can be a combination of yes $ but also include multiple assets and other passive income channels that helps curb your risk of failure or cash flow depletion.

Examples such as reinvesting & diversifying in real estate to help build sustainability for the what ifS in business is certainly at the top of that list.  You can have a top tier performing business and all of sudden the shit can hit the fan as they say.  This can be a sudden drop in revenue, a large client decides to jump ship, even a surge of volume that suddenly decreases your cash flow and liquidity to pull through on your debt obligations… you get the picture.   

In 2023, business debt levels are through the roof;  rising inflation in materials, continued supply chain restrictions, and high fuel prices are contributing to a deteriorating Canadian economy.

It is my assessment that many of these same drivers mentioned above will be propelled by continuing rising interest rates and recession issues for the remainder of 2023 and possibly the first quarter of 2024. These issues will impact every business regardless of industry sectors.

The biggest erroder of business success is ignorance and having tunnel vision just riding the wave during the good times.  Not knowing, understanding, ignoring how to create value can be fatal for any business.  Remember this, the value a business creates equates to the leverage aka negotiation power a business has.  The best way to increase business sustainability is to negotiate to the upside and that goes hand and hand with the value that you created yesterday, last week, last year or a decade ago.

If you want to not only survive but also thrive in this environment, then focus on new diversification strategies.  Embrace calculated risk and write down the following as a reminder.

To BUILD a successful sustainable resilient business you need to take a lot of risk with a small amount of money consistently over time and compound these small successes.  And more importantly I learned that to MAINTAIN your successful sustainable resilient business you need to take calculated small risks with big amounts of money. SsF

Leverage comes from creating a value MOAT, as we discussed last week a moat is Click Here

A business with a MOAT has leverage to follow the $$$.  Not any kind of $$$ the $$$ that has sustainable profitable margins.  This compounding effect is how a start-up business CAN increase exponentially their chances of becoming a trusted staple leading business.  

SsF