When It’s Time To Invest

Time to invest

When is the right time to invest in your business?  We’ve been through a very tough year and for many businesses, surviving has been the goal.  With vaccines rolling out globally and COVID case numbers falling, brighter times are ahead.  I am also reading about fears of a fourth wave in the pandemic, as new variant strains emerge and take hold.  We continue to experience a high level of uncertainty, even if you are an optimist like me.

Boom and bust cycles

Many businesses shy away from investing when the future is unclear.  It reminds me of my early days at Intel.  The semiconductor industry was very cyclical back then.  About every 2-3 years, there was a boom followed by a bust.  When business was good, suppliers would invest in new fab capacity to meet the forecasted increase in demand.  Everyone invested, significantly increasing industry capacity, leading to an over-supply situation.  With excess capacity to fill, suppliers slashed prices, and customers took advantage, building up their inventories.  That was until they had more than enough and stopped buying.  This sent the industry into the next bust cycle.  Capacity was cut back, costs and jobs were slashed, until the next cycle began.

The time to invest

As it turns out, it was the actions of the herd that created these cycles.  Everyone over and under-invested.  One company stood out from the crowd, that was Intel.  They had a different philosophy.  When the industry hit a bust cycle, it was time to double down and invest.  In the short term, they had to manage some excess capacity, but they were ready for the rebound.  When the market recovered, Intel’s competitors couldn’t respond because they cut capacity.  In contrast, Intel was ready.  They used the start of each boom cycle to increase their share of the market, making them stronger.  As they got stronger, it was easier for the them to weather the next down cycle and invest ahead of the industry.

So you may be wondering, what does this have to do with you?  You are not Intel and you don’t have millions of dollars to invest in a downturn.  While that’s true, are you waiting like everyone else for sure signs of the recovery or are you investing now to get ahead?  You don’t have to invest significant amounts of money.  Here are some things you can do now:

  • What new services can you pilot and offer?
  • What new markets can you assess and enter?
  • What talent can you hire before it is snapped up?
  • What news skills can you learn?
  • What can you stop doing to create space for the new things?

While your competitors are fearful to invest, what are you doing to get a head start?