Page 30 - Wire Rope News & Sling Technology - October2019
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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
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