Page 26 - Wire Rope News & Sling Technology - October2019
P. 26

How to Recession-Proof

                                       Your Business

                 Plan Now to Survive and Thrive in a Downturn

                                                   by Phillip M. Perry

         Businesses can survive and thrive in a recession if they retool their operations
         well in advance of the economic downturn. Critical steps include eliminating
         operational inefficiencies, leveraging technology for increased productivity,
         paying off credit lines, securing sufficient working capital and diversifying
         funding sources. Above all, managers should plan for continued growth rather
         than resort to undisciplined cost cutting.

                 hen will the next recession
                 hit? No one knows, but busi-
         Wness  leaders are  aware the
         nation’s decade-long run of good times
         can’t last forever. Two-thirds of the na-
         tion’s chief financial officers expect the
         United States to tip into an economic
         downturn by the third quarter of 2020,
         according  to  a  Duke  University/CFO
         Global Business Outlook survey.
           Reasons?  Experts cite potential trig-
         gers as disparate as a serious U.S.-Chi-
         na rift, an interest rate misstep by the
         Federal Reserve, the growing levels of
         corporate  debt  and  the  ballooning  fed-
         eral deficit. Any one factor might tip the
         economy  into  a  recession—loosely  de-
         fined as a significant drop in economic
         activity lasting more than a few months.

           Whatever its cause, a recession is
         bound to pose bottom line challenges.
         Can the pain be lessened? Yes, if you
         take certain steps to retool your opera-                                           Illustration © uzenzen | iStockphoto
         tions in advance of the slowdown. And
         the  time  to start those  steps,  say the   usually bad ones.”       PLAN FOR GROWTH
         experts, is now.                     Early steps to retool  your  business   So what to you do, exactly?  Above
           “Churchill said ‘never waste a cri-  can return rich dividends in the form of   all, avoid the common mistake of un-
         sis’,” says John McQuaig, manag-   a stronger bottom line long before the   disciplined cost-cutting. You can’t save
         ing  partner  of  McQuaig  &  Welk,  the   recession  actually hits. And once the   your way out of a crisis.
         Wenatchee, Wash., based manage-    economic  downturn  does begin,  your   “Focus on expanding your business—
         ment  consulting  firm  (   lean and mean machine can beat  the   not on just cutting back,” says Cliff En-
         “His  advice  is  just  as  relevant  when   competition.             nico, an attorney and business consul-
         it comes to preparing for one. Don’t   “With the right  preparation an eco-  tant in Fairfield, CT (
         waste the time that still remains be-  nomic downturn can be more of an op-  As you approach a recession strength-
         fore the arrival of the next recession.”   portunity  than  a  problem,”  says  Lisa   en your market position by developing
           Waiting too long is risky. “Shooting   Anderson,  president  of  LMA  Consult-  initiatives to win new customers.
         from the hip in a downturn often leads   ing Group, Claremont, CA (lma-con-  Selling more to your existing market-
         to business decisions that are com- “While less capable   -and expanding it—need not be expen-
         promises or worse,” says Michael As-  businesses fall by the wayside your own   sive. You can likely ferret out new ways
         bury, founder of Elevate Coaching and   business can expand its customer base.”  to get more from your current organiza-
         Consulting,  Trinity,  NC  (elevate-out-  Bonus tip: Businesses  that prepare   tional structure. Further, rationalizing  “Unprepared  businesses   for a recession tend to pull ahead dur-  your current resources often translates
         are left with fewer options when tough   ing and after a slowdown,  says Har-  into a reduction of expenses.
         times arrive, and those options are   vard Business Review.                            continued on page 28

         26     Wire Rope News & Sling Technology   October 2019
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