Page 30 - Wire Rope News & Sling Technology - October2019

continued from page 28 today to pre-approve that?’ If you give tion,” says Anderson. “Keep your em-
a requisite for success, so is an appro- your banker enough time just about ployees in the loop by letting them know
priate debt structure. “If you have ex- anything can be worked out. But if you that economists are predicting a reces-
pensive short-term borrowings against run into the bank at the last minute for sion. But rather than causing panic by
long term assets, you might want to financing, the story is far different.” casting the economic downturn as a bad
negotiate longer term debt,” says Mc- No matter how secure you are with thing, present is as an opportunity to
Quaig. The lower payments will help your main bank, have Plan B ready to gain market share by spending more
you work your way through softening go. “You want to cultivate a secondary time with customers, solving their prob-
revenues if operations shrink. You can financing relationship,” says Feiman. lems and convincing them your firm will
always accelerate payments down the “Tell the institution you will not be be around while competing suppliers
road, but you cannot decelerate them.” making them your primary source to- fall by the wayside.”
You might be able to take other steps day, but you want to start a relation- Brainstorming with your staff can
to clean your balance sheet. Examples: ship that leads to their stepping up to uncover hidden treasures. “Employees
Can a significant portion of short-term the plate if and when they are needed. have a vital perspective on the market
debt be restructured through a ten-year Consider starting a small account to because they are so close to custom-
Small Business Administration-backed encourage their commitment.” ers,” says Feiman. “Encourage them to
loan, resulting in smaller monthly pay- Trimming unproductive fixed costs speak up with their ideas.”
ments? Can your straight line of credit and wasteful expenses are both great This is also a good time to build flex-
be made less expensive by turning it ideas. But avoid the common tempta- ibility and agility into your workforce.
into one secured by accounts receivable? tion to short-change marketing. “While “Cross-train skills so you can move
Bonus tip: Postpone major initiatives you need to be careful and strategic in people around in response to unan-
unless they promise to generate timely what you spend, promotion and adver- ticipated shifts in the workload when
significant revenue. tising and growth-related initiatives are the recession arrives,” says Anderson.
mandatory, even before and during a re- “And also consider utilizing temporary
DIVERSIFY FUNDING SOURCES cession,” says Joel G. Block, president of labor to fill in the gaps, performing any
Time is also of the essence when it Bullseye Capital, a management consul- work duties you are not sure will carry
comes to long term debt. Banks hold tancy in Agoura Hills, Calif (bullseyecap. into the future.”
their cash tighter when recessions be- com). “If you neglect them, your business Resist the temptation to trim the
gin. “It is easier to borrow now, when will not continue to grow. You will poten- workforce too deeply when hard times
banks can see you have healthy cash tially shrink into oblivion.” arrive. “While cost cutting can be im-
flows,” says McQuaig. “The situation is Bonus tip: Sell unneeded assets now, portant when preparing for a recession,
far different when your income starts to using the cash to pay down debt and try to keep your trained workforce in
drop. Waiting too long to apply for loans reduce leverage. place,” says McQuaig. “Many times
gets a lot of businesses in trouble.” companies cut their staffs too deeply,
Make sure you are on solid ground ENLIST YOUR EMPLOYEES then cannot recover after a recession
with your primary funding source. “Now Make the recession a team effort. because skilled workers are not in
is a good time to have a conversation Push your business into third gear by place to regenerate revenue.”
with your banker,” says Feiman. “Ask enlisting the energies and ideas of your Bonus tip: When a recession hits,
questions such as, ‘What if a recession employees. eschew morale-busting layoffs in fa-
hits? What if I need a little more work- “When it comes to personnel, the big- vor of more productive labor-saving
ing capital? What do you need from me gest downside is a lack of communica- adjustments such as hour reductions,
furloughs, part time positions, and per-
formance pay.
In 1924, Germany’s ‘Adolf Bleichert & Co.’ celebrated its 50th Anniversary. RETOOL AND RECHARGE
By the time of this occasion, the company had designed and built the While no one is happy when the econ-
world’s record holding wire ropeways: Longest and highest elevation omy softens, a downturn can serve to
(Argentina); Length of system over water
(New Caledonia); Steepest (Tanzania); reveal opportunities for making your
Highest capacity (France); Northernmost business stronger and more profitable.
(Norway); and, Southernmost (Chile). Turn hard times into an advantage.
“View the recession as an opportu-
Written by the great-great grandson nity, not a threat,” says Ennico. “Take
of the company’s founder, this book the time now to ask how you can ex-
includes over 100 pictures and detailed pand your business when the downturn
engineering drawings that explore arrives, even though you will not be
the legendary company’s history, and making as fat a margin. What are the
several of its record-holding systems.
services and businesses you can get into
without too much change? How can you
Available at Amazon.com for
your Kindle or in paperback. show current and new customers you
are willing to better meet their needs?”
Available at CreateSpace.com Above all, be flexible.
in paperback. “Good businesses make money in
good times and bad,” says Ennico.
‘Like’ it on Facebook for
relevant information and news. “While there is no recession-proof busi-
ness, the winners are those who adapt
best to challenging conditions.” WRN

30 Wire Rope News & Sling Technology October 2019