Trading In a Downturn - Link! Network
“Lots of companies are getting out of things, for you this means that there are a lot of new opportunities around. There are sectors, and companies within sectors, that are doing very well, right now. Find them!” Ken Germaine, Guest Speaker
Economic slowdown is a natural part of the business cycle – we will get through it. This was the positive message that Ken Germaine delivered to the members of LINK! when he addressed our February event. He reminded the group that the average length of a world recession is around 16 months.
The participants were invited to think hard and cold about where our businesses are at the moment. Ask yourself “where am I in my business cycle?” he advised. Figure out what you are good at and match that with where the demand for those products or services lies. Take a look at what your competitors are doing. If they are busy falling off the cliff, are there opportunities for you? For example, to pick up some extra business or top class staff?
If your business has slowed down and you do find yourself with a bit of slack time, there are certain things you could and should be doing to reposition and prepare yourself for the inevitable upturn, Ken told us. Now is the time to review your business plan. Reconsider your goods, services, markets, customers, staff and finance. This is the time, he said, to develop peoples’ capacity. You may not have to turn to external training – you know your own business better than anyone.
There is a direct link between good administration and good cash flow. Review your debt control system. Check that your terms and conditions of sale have high visibility on your invoices and statements. Review your networking strategy – find out where your target clients are networking and network there. Use the spare time to catch up with people – for example talk to your bank manager or find yourself a mentor.
You need to be a little bit careful when taking on new clients in this climate. Do your credit checks diligently. In fact, Ken told us, there is no obligation to extend credit. “A credit facility is something that businesses should have to earn.” he said.
Ken talked us through the indicators of the downturn: the housing market, price of oil, strength of dollar/euro, interest rates and inflation. The same indicators will apply at the beginning of the upturn and with low inflation and low interest rates Ken predicts that we may be just 6-10 months away from the beginning of the up-swing. You must keep yourself current, he advises, keep reading.
In summary, Ken advised us to use the coming months as a launch pad for the next upturn. Train and capacity-build ourselves and our teams. Build our networks and business alliances. Above all, have the right frame of mind. Don’t panic – use time wisely.
LINK! members can join our members-only Group on LinkedIn at:
http://www.linkedin.com/groups?gid=1811235