Recession Planning
Recession Planning PDF Print E-mail

Because economic times have been so good for the last 20 years, many of today's family and closely held business leaders have never really been through a prolonged slump. They have no direct experience upon which to fall back, no model of what to do first, second, or third in challenging economic conditions. As such, the Family Business Institute reminds you that with the right attitude and the right assessment of your short and long term needs, a recession can be an opportunity to emerge as a much leaner, stronger, and more capable enterprise than ever before.

Among the other opportunities are to: buy or merge with distressed competitors, increase marketing and promotion expenditures relative to peers, negotiate favorable terms and conditions with suppliers, reengineer systems and processes in the company, undertake leadership development and improved employee training, etc. With that being said, the main ways to take advantage of a recession are: 1) get great numbers and cut expenses with a scalpel instead of a meat cleaver, 2) get the wrong people off your bus, and 3) utilize your time more wisely.

Specific Services

Expense Reduction

The first reaction for many business owners during soft economic periods is to cut, cut, and cut some more. They focus on slashing expenses across the board. The thinking is if the top line (revenue) is flat or going down, they better reduce the expense line even faster so they can stay in the black. This is a logical reaction, but it's rather simplistic. The entrepreneurial way of cutting expenses is like taking a meat cleaver to the problem when the reality is that a scalpel is the more appropriate tool.

People Management

One of the great opportunities that a recession presents is to evaluate your workplace from top to bottom. For years The Family Business Institute has been preaching the gospel of “getting the right people on your bus,” that is, building rigorous HR systems for developing job descriptions, recruiting the right kind of people, hiring them through a team, highly regimented process, and retaining them over time with excellent compensation, incentive benefits, and evaluations. The system also provides for the necessity of "getting the wrong people" ▬ even family members ▬ off the bus. 

Time Management

One of the counterintuitive benefits of a recession is that your company probably isn’t running at 110% capacity anymore. You now have time where you can actually stop, catch your breath, and undertake a review of yourself and your operations. For example, a family business owner who’s in charge of developing business for his firm should be spending 10% to 25% of his time on business development without fail. If that’s not the case, you should perform a time and activity audit in order to achieve greater productivity.

The Family Business Institute Difference

Our commitment to helping you achieve breakthrough success is absolute. Drawing upon our unparalleled experience in working with family enterprises across virtually all industries and business functions, we educate our clients about the need to utilize a comprehensive and integrated approach for the benefit of their family business system. The Family Business Institute differentiates itself by addressing not only the typical financial side of the family business triangle, but also the other two sides which deal with operational and/or interpersonal issues.

Ready to Learn More?

In addition to the services listed above, the Family Business Institute can also assist you with many more services in the area of Recession Planning. For more information, contact us at (877) 326-2493.