Now is a good time to position your company for recovery
By Bud Gayhart
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Well, you have made it through the "dread" of winter; you have survived the first two months of 2009 with its rising unemployment and collection of bad news.
We are now into the month of March, which has lots of issues associated with it. If you are a sports fan it's referred to as "March Madness" when college basketball teams vie for supremacy in the NCAA or NCIAA tournaments. From a weather perspective we use the adage "in like a lion, out like a lamb" (or the inverse) to describe the transition in temperatures and conditions. And for those into history there is the call to "beware the ides of March" (the fifteenth of the month), which could have saved Julius Caesar a great deal of discomfort.
So how do you view the month of March? I hope you view it as an opportunity; you should! We are now entering the last month of the first quarter of the year. That means you have nine months to generate a positive financial result for this year with or without the impact of the stimulus package. Your business still needs your attention, and now is a great time to position yourself for the benefits of an economic recovery. When will that happen? I expect the beginning of an "uptick" by the third quarter. That prediction is based upon indicators I am seeing in several markets right now.
One of my client companies produces a capital-intensive industrial product. This product requires more than four months to build; add to that shipping, installation and shake-down time and it will be six months before the product is installed and ready to produce an output. With the cost of these industrial devices reaching well beyond $300,000 each, my client has six orders in place. Those six orders landed in less than four weeks and that is a sales activity level never before achieved in 50+ years of operation. This company is typically an early indicator of recovery. Their customers do not order product unless they intend to be using it in their production processes, delivering their goods to burgeoning markets.
Another client is in the process of expanding their facilities to accommodate increased orders. In 2007, their business grew 40 percent; last year they doubled their sales. This year they are expected to double again. I could share more positive stories of business growth but that is not the purpose of my article. The message I wish to convey is that things are getting better and will continue to get better throughout this year. My question to you is, "What are you doing to prepare for that improvement?"
Do you have the human resources available to respond to a growing market? Will you be able to meet the quality requirements of your customers when the orders land? Can you meet their delivery schedule? Will you have the financial resources required to cover inventory purchases and labor costs in advance of customer payments? The businesses that are positioned to address these issues will be the ones that not only profit from early recovery orders but also are able to distance themselves from the competition as the economy begins to build momentum.
You can be a leader or you can be a follower. You have the ability to choose either course. If you choose to be a leader, then begin planning for those needs that will first impact your enterprise. If you will need more people, where will they come from? Do your current employees have the skills they require to support your business through the end of this year? If not, can you leverage resources to rapidly assimilate those talents as orders come in?
March is truly a transition month and you now have reasons to begin making changes and anticipating the needs of 2009. Take advantage of this month and begin laying the groundwork for your business recovery. Be like those examples I cites earlier, be a nonconformist and grow your business during a weak economy. If you can advance your company during turbulent times, you will be able to leap frog the competition and chart a course for significant growth.n
