August 2009
Preparing Your
Company for Economic Recovery
Many business
owners are looking ahead to better economic times, and they’re
positioning their companies in ways that will allow them to out-perform
their competitors when prosperity returns
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See Part 2, published in the May 2010 issue of the Bottom Line
No one knows when the economic recovery will
begin, but savvy business owners are getting ready for it. Good
entrepreneurs are always looking at improvements, and this recession
offers you a chance to reflect on your business strategy.
As an example, the July 2009 issue of Inc.
magazine offers this short list of “Ways to Prepare for the Recovery”
and to plan for the end of the recession:
-
Invest in technology.
Technological improvements, such as new billing software or an
online ordering system, may help add new customers with little
additional cost when business picks up.
-
Snap up talent on the cheap.
Because of layoffs, the job market is flush with qualified
applicants. Take this opportunity to accumulate talented employees
at a discount.
-
Ramp up training. Invest in
targeted training and development programs to prepare employees for
the economic rebound.
-
Form strategic partnerships.
Make the most of the business slowdown by striking up partnerships
that will pay off down the road.
-
Get to know prospective customers.
Build relationships with potential customers and learn more about
their needs, then tailor your goods and services accordingly.
-
Cut costs strategically. Instead
of making across-the-board cuts, analyze costs carefully and reduce
spending in ways that are unlikely to impair future growth. Be sure
to put controls in place so spending stays in check after the
rebound.
We’re starting to see business owners take to
heart suggestions such as these. They’re marketing, reworking business
models and looking at possible real estate deals. Instead of simply
dwelling on the short term – current business conditions, the need for
cost-cutting and belt-tightening – they’re also looking ahead to the
inevitable return of better economic times. They’re positioning their
companies in ways that will allow them to out-perform their competitors
when the economy rebounds.
Questions. Here are some strategic
questions that might help your business get an extra boost from the
recovery:
-
Do you have worthy competitors who may
be good acquisition targets?
-
Are your customers going to need
products or services, post-recession, that you’re not currently
providing?
-
One of the current trends among
consumers is shifting their purchasing to low-cost, high-value
products and services from trusted sources. Can you increase market
share now – and expand your future customer base – by offering
well-publicized discounts?
-
Do you have the human and capital
resources to meet anticipated customer demand?
-
Do you remember when you simply
couldn’t find good help? Now may be the time to accumulate talent
and deny your competitors the chance to hire them later.
-
If hiring is not in the cards, is this
a time to “audition” potential future employees by bringing them in
on a contract basis?
-
Is this a time to relocate, to take
advantage of incentives that landlords are offering to prospects
(and that they may be withholding from their current tenants)?
-
Is now a good time to lease more space
in your current building and lock in favorable rates?
-
If your competitors have cut back on
advertising and marketing, perhaps reducing their profile with even
their existing customers, could “getting your name out” help you
steal a top customer?
-
Are you making optimum use of
technology? And is your website doing as much as it could to attract
and interest potential customers?
-
Does the recession give you an
opportunity to implement operational or structural changes that you
were afraid to impose earlier, for fear of making market-advantaged
employees unhappy?
As many stockbrokers were telling their
clients last fall about the behavior of the stock market, “This is
different.” To some degree, that’s true of the economy at large, and
companies that keep doing what they have done in the past with
expectations for better outcomes may fall victim to the adage, “Do what
you done, get what you got.”
As we all have learned the hard way, change
is inevitable. Don’t let it just happen; be the one who drives it, and
situate your company now to be propelled by the return of economic
prosperity.
Based in Mesa, Arizona, and serving closely held businesses in the East Valley,
the Phoenix area and throughout Arizona, Schmidt Westergard & Company, PLLC, is
an independent full-service tax, audit, accounting and business advisory firm
focusing on the middle market.
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