John F. Kennedy was fond of saying, “The time to fix the roof is when the sun is shining.” Ladies and gentlemen, the sun is shining on the production industry right now. But you don’t have to go too far back to remember a time when that wasn’t so. The summer of 2001 was ugly. Then along came nineteen terrorists with box cutters and the whole situation went south. The economic implosion had a domino effect on the industry. Events were cancelled, production companies were left with idle inventory, and manufacturers had a hard time collecting receivables. Lots of companies went out of business. The ones left standing were the ones with a strong balance sheet — little debt and lots of cash to carry them through the hard times. Look around at the companies who are still in business today that were around during 9/11. What do they have in common? A strong balance sheet. The economic times have changed but the law of survival hasn’t; cash is king, debt is toxic to your business. Now that business is good and jobs are plentiful, it’s time to fix the roof. Pay down your debt and fill your coffers with cash.
-From Richard cadena's January, 2007 Editor's Note.
