In this uncertain business economy, the answer is…

You should be both, conservative and liberal.

As a conservative, you need to watch every single penny that goes out of your business.  You need to aggressively cut costs.  Evaluate every line item in your profit-and-loss statement to see what you can eliminate.  You should spend absolutely no money on anything unless you think it through.  Any major buying decisions need to be thought through for a day or two.  Take the emotion out of it and keep asking yourself:  Am I making the right business decision?

The business recovery from the recession is expected to be long and painful.  The difference between survival and failure may very well be cash.  Or how much cash flow you have.

Stay on top of your receivables.  Make sure your customers are not exceeding the credit limits you have set.  If they are don’t hesitate to call them, ask for collection of money due you or cut them off until they get their account current.  You don’t know what their business condition is.  If they are not in a stable financial situation, you don’t want to find out they have gone out of business, run up a big tab and left you holding the bag.

Now as far as being a liberal in running your business. There are many opportunities today that did not exist before the recession.  You may be able to buy inventory at a significantly reduced price.  There may be a building available that is priced so low that it is hard to pass up.  For sure, there are great people out there without jobs who would be assets to your company as employees.  Or there may be a competitor who wasn’t paying attention to their business and you may have the opportunity to buy them out to expand your own business at a basement bargain price.

As a CEO, company president or business owner, you need to find balance between being a conservative or acting as a liberal in your business to maintain business success and profitability.  There are going to be times in your business during this recession and even during the eventual economic recovery when taking a chance or taking a risk is going to require a lot of business savvy as well an inner knowing from your gut it’s the right business move to make at the time.  Sometimes you have to spend money when you least want to so you make money down the road or long term.  You need to know when to be a penny pincher and when to be a free spender in order to add value to your business and make your business as strong in the marketplace as possible.