These days most entrepreneurs are closely guarding their cash – no matter how well their start-up is doing and no matter what sort of spending last year’s business plan dictated. Not only that, it seems that the general consensus right now is that spending in an attempt to grow a start-up is a fool’s errand at best. But is it? As the Wall Street Journal reports, some businesses that haven’t been as dramatically impacted by the recession are questioning whether they should continue hoarding cash, or whether it’s time to spend in an effort to elbow out some of the weakened competition:
“At a recent board meeting, Jaspersoft Corp. Chief Executive Brian Gentile found himself stuck between two camps: the savers and the spenders.
One faction of the San Francisco software company’s board wanted Mr. Gentile to preserve the start-up’s $15 million cash reserves by keeping expenses down. Other directors urged him to grow and take market share from rivals weakened by the recession.
‘It was sweaty, it was tense,’ said Mr. Gentile of the November meeting. ‘It was literally a two-hour rejustification of why we’d defy the odds.’”
Such is the struggle that many businesses are facing right now. Do you take the risk that comes with spending and potentially weed out competition and grow? Or do you save, bide your time, and focus on growth only once the downturn’s over?
For this week’s survey question, we thought we’d ask what your strategy would be if you found yourself in the position to make such a decision. Sure, there are all sorts of variables that would figure into such decision making, but we’re asking you to ignore that, because this is pretend. So: if you’re in charge of a business that isn’t struggling too badly right now, what do you choose: spend in a bid to push out some of the weakened competition, or hunker down and cling to what cash you’ve got? Tell us what you think by clicking to vote in the survey below: