On Monday, as the stock markets were continuing to crash at warp speed, someone asked me my ideas.

I told them invite to the crash of 2011!

And while the 16% drop in 10 days is only the third time that has taken place in 4 decades (likewise 1987 and 2008), this volatility possibly continues for a long time.

For two factors:

1) An An Incorrect Measurement Tool-A GDP, gross domestic product. A Currently we determine the success of our economy based on just how much we increase our usage. A When the United States was the only country (mainly) doing this, we could basically get away with it. But with the whole planet now attempting to do it, it is unsustainable.

2) A A Requirement & Poors' Message- devaluing the United States Federal government's ability to repay its debt.A While it isn't S&P's reason, the primary one from my viewpoint is # 1 (above). A This was magnified by the clear demonstration this summer season of federal government's failure to work as a unit.A The message became painfully clear-- they do not have the finest interests of the nation in mind.

Envision running your company this method?

For example, let's say you have a company that offers handbags.A For many years you have actually been doing well. Your track record and revenue has actually been the envy of the market.

Then gradually the competition begins coming in.A They start damaging your prices and pursuing your most loyal consumers.

As sales begin to slip, you increase your marketing spending plan to attempt and keep them at bay.

But they keep coming at Century Consulting you.

You cut your costs and work your employees harder.A To cut expenses, you use cheaper labor and materials.

As a result, the quality of your purses drop.A Consumers are less delighted with your brand name.

Now you require more cash to pay costs and increase your marketing, so you secure more loans.

On the other hand your workers and supervisors, mainly worried to the max, begin blaming each other for the mistakes and wrong turns the business has actually been making.

Next you discover the banks have increased the interest rate on the financial obligations you owe them.

One day you get up and ask yourself how you ever got into this mess.

How to manage the financial obligation crisis in YOUR company:

1) A A Good vs. Uncollectable Bill- "Good" is financial obligation directly attributed to generating money for your company, by means of sales and reduced expenses.A When taking a look at borrowing, always ask yourself, "What is the ROI on this purchase?" A (ROI= Return on Investment). A The answer must be a numerous of what you bought it, like "10X". A For instance, when I obtain $100, it is good financial obligation if it will generate at least $1,000 in return.

2) A An Excessive vs. Correct Amount of Debt- risk and capability to pay it back are required here.A Risk = O * P, where O= possible outcome and P= the possibility of that outcome.A The closer that number is to "1", the better.A There are risk assessment tools online to use.

3) A A Leveraging Debt- irregardless of your financial obligation position, use it as an opportunity to innovate and recreate your business's direction it is heading. For example, utilize the fact you have your debt to it to create urgency for needing to discover new chances for your business to capitalize on.An Utilize it to develop more abundance of cash and happiness in your life.

4) A An Increase the Team- focus on team effort and checks and balances. Make certain everyone is clear on the UnReasonable goals and challenges ahead for the business.A And they are all in this together.A As a team.A This will most likely include compromise.A For effective compromise, it is crucial to leaving the ego out.

5) A A Stay focused on the greater excellent- for all your stakeholders.A You will require to specify this with your team.An Utilize it as a choice making process as you work your plan forward.

6) A A Focus On Your Home- stakeholders are more than likely watching your motions. Whether it's your creditors or communities, social media can change things for you on a dime.A Stay prepared, all set to respond and adjust when necessary.

7) A A Redefine Success- and what it suggests to you.A Maybe the finest method to determine success is not on how much we purchase, however how delighted we are.A Now that's UnReasonable! Imagine what that would do to who is # 1 in the world.A For example, the United States would probably be towards the bottom and Costa Rica towards the top of the list of "happiest" nations.

So, I think the S&P downgrade was a good thing.A It is a wakeup call that our management team and priorities are a bit out of whack.

And with the ideal focus and intents, we will change our sails and move through these economic difficulties to more powerful, more grounded nation and planet.

Action Steps For the Week:

When was the last time you examined the state of your business's financial obligation?

Do you feel pressure or comfy about your cash position?

If you feel comfy, review it to see how much you need to cover your standard nut (i.e. monthly expenditures). An Establish a strategy to have 3-6 months as a cushion.

If you feel pressure, evaluate the actions above.A Determine where your financial obligation circumstance is from a threat vs. reward of investing your cash on certain investments in the company.A Determine it from three situations: low, medium and high likelihood in taking place.

Next, figure out if it is mainly "great" of "bad". A Remember, if it is producing income for you, it is good.

Declare the response to your group.

Use your formula for the ROI for any capital infusions (i.e. "10X").

Then get clear with your group and guarantee they work well together and will collaborate through the challenges ahead.

As a group, specify what "the higher excellent" implies to your company.An Ensure the team remains concentrated on this.

Last but not least, ensure you integrate the joy component.A What does this mean for you and how will you determine it going forward.

With all this in place, search for methods to take advantage of this company instructions with your consumers.

Doing these actions will most likely surprise you in how rapidly and fun this will be for you.