can anyone explain

Question

How do economic cycles impact how businesses can implement cost saving strategies such as bootstrapping, bartering, utilizing discount services, leasing equipment, trade credit, and conserving cash? What steps would you take in your business in economic down cycles?

Answer 1

Briefly -- during economic down cycles, businesses hoard cash. Nobody wants to risk spending down their ready cash because that's the most crucial component of business continuity. And during down cycles, banks and other lenders are more risk-averse, lending at higher rates, or not at all.

During boom times, there's plenty of ready cash to throw at any problem -- and if you run out, rates are low and lenders are eager.

When cash is loose, it's faster and cheaper to buy a SaaS solution vs. bootstrapping. It's easier to just pay ticket price than to engage in a lengthy haggle about bartering, oh, three crates of socks for a visit from the forklift repairman.