Is your small business or nonprofit experiencing a financial
decline? Trigger point finance can help avert a financial crisis, but must be
combined with other strategies for optimal effectiveness. Before revenues plunge 30%-40% as we have
observed in some instances, establish financial trigger points for 4%, 8% and 10%.
For each trigger point, develop a contingency plan that
brings spending into alignment with revenues. The advantage is that each plan
rolls out automatically. No urgent management or Board meetings are needed.
This frees decision makers up to focus on corrective actions to restore
revenues. The first post in this series focused on how to pay it forward, by
setting up a sinking fund for planned purchases. That was followed by introducing and redefining a real estate concept known as "highest and best" use. The next post will focus on
how to set up a widely accepted organizational structure that expands and contracts with the needs of the organization.
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