The next year or two are likely tough all around for businesses. It is amazing how the so-called “market conditions” have deteriorated in the past 9 months. It was in January of this year that we had celebrated another new high of the Sensex at over 21,000 and the talk was of 30,000. Now, we will be lucky if we do not touch 10,000. The real estate bubble in India is another one waiting to pop given the rapid rise that has happened over the past few years. The stocks of the companies in this sector have already popped.
From what I hear, there is talk of a “liquidity crunch.” Companies are having a hard time raising capital or getting loans. And as the financial contagion spreads, no one knows who’s next to fall.
These are also good times to build businesses. If one can come up with innovative solutions which can show RoI quickly or cut costs, there are greater chances of getting a quick adoption. Also, for start-ups and early-stage companies, conserving cash for the long-haul is going to be very critical. One has to marry boldness with prudence to come out ahead in the months to come.