Recession-Proof Your Business
By Sean Hayes
The recession is hitting most businesses. In order to survive these difficulty times it is imperative to at least consider some of these time-tested techniques.
1. Cut Spending
One of the best ways to cut spending, in Korea, is to attempt to renegotiate your lease. Creative contracts can be drafted that benefit landlords and tenants.
In large commercial lease settings a law firm or real estate consultant, such as Savills, should be utilized to renegotiate your lease, since they often have ideas and also relationships that can be employed that can assist in getting the deal done.
Other items that must be considered are teleconferences in lieu of traveling, outsourcing, cutting overtime, sharing office space, weekly cash flow reports, cutting of expense accounts that are not generating business and the other ubiquitous cash saving techniques.
2. Keep Your Good Credit
In tough times, one of the most important components of your business may be obtaining credit in order to last through these times. It is essential, especially in Korea, to garner an even better relationship with your banker and stay up to date on all payments.
For small businesses, banks will often look to your personal credit. Many must consider utilizing credit cards, home equity lines, and personal relationships to garner capital needed to stay afloat.
3. Receivables
During recessions, clients that are getting behind on payments are often clients that will never pay. A candid conversation with the client may produce obvious answers to these difficulties.
4. Marketing
A recession is not a time to cut back on your exposure to clients and potential clients, though it is a time to reanalyze your marketing budget. More cost-effective forms of marketing may replace traditional forms of marketing.
A good study of your marketing budget is in order and an analysis of the effectiveness of certain marketing strategies is imperative. Often expensive traditional marketing can be complemented with innovative marketing strategies to lower costs.
5. Keep Busy
A recession doesn't mean that you can stomp-off to the local pub early every day. One of the most cost-effective ways to generate more income is to use your time wisely.
If you are the rainmaker at your business, a slow economy shouldn't reduce your ability to succeed, but new found pessimism can lead to a good rainmaker to waste time and opportunities.
6. Maintain and Strengthen Relationships
Business is generated through relationships. Keep you present clients, build relationships and foster more opportunities for staff to maintain and strengthen relationships.
7. Consider Retooling Your Business
You need to go where the clients are. If you realize that your business is a thing of the past, the best time to realize this is during a recession. The cost of retooling, restructuring, or bringing to market a new product may be considerably cheaper during a recession.
8. Hire Great Talent
Many companies that are downsizing may terminate great talent. Snatch them up. Great talent produce when the times are great and exceed when the times are tough.
9. Outside Consultants
Many great outside consultants are available during recessions at a fraction of the cost of boom periods. If you were always considering doing a comprehensive market survey of a potential market, do it now. If you were always considering evaluating the benefits of new technology, do it now.
10. Executive and Sales Coaching
Many great companies stay great because of the consistent training programs offered to their key personnel. Don't skimp on the necessaries. With great, innovative, and skilled personnel, your company will excel.
Sean Hayes is a New York attorney working with the Seoul office of LOGOS Law LLC, one of Korea's largest international law firms with offices in Beijing, Hanoi, Ho Chi Minh City, Incheon, Moscow, Phnom Penh, Seoul and Songdo. He formerly worked as a law faculty member and for the Constitutional Court of Korea. He can be reached at SeanHayes@LawLogos.com and www.thekoreanlawblog.com.