Let's hear about the opportunities.
They're everywhere, if you believe Frank Ryan. He's a CPA, a Business Learning Institute instructor and president of a management consulting firm that specializes in turnarounds, crisis management, strategic planning and the like. He has a ton of ideas about how businesses can not only survive the recession, but actually set themselves up to thrive once it ends.
In a recent phone interview, he offered up these tips:
- Manage your “financial capacity”: That's all of your available assets — checking accounts, accounts receivable, inventory, equipment. Ryan says businesses need to “walk the balance sheet” on a regular basis, understand what they have on hand and get a handle on their debt. “What was taken for granted before — cash availability — has to be more deliberately planned than it was before,” Ryan says.
- Be even more open and honest with your lenders than usual. “Banks love good news and aren't happy about bad news, but they hate surprises,” Ryan says.
- Turn your suppliers into valuable parts of your operation. Explains Ryan: “I rarely approach a supplier and say, 'I need you to cut costs.' What I do say is, 'I'm approaching the market from a different perspective; do you want to participate in this with me?' The smart company that deals with its suppliers as if they are a valuable part of the operation is one that will survive and thrive in the long run.”
- Develop criteria for what makes a good customer. Here's a hint: It's not just someone who will buy your product. “Just because someone is willing to buy your product doesn't mean you should sell to them,” Ryan says. “A good customer (should be) someone who is willing to pay a reasonable price, and who knows what he or she wants.”
- Renew your commitment to your employees. Laying off talented employees to cut costs is a lousy strategy, Ryan says, because the people you lay off today will be working for your competitors when the economy finally recovers. “Businesses made a fatal mistake about 15 to 20 years ago when they convinced their employees that they're expendable,” he said. “I encourage companies to convince employees that they're not. Create an environment in which it's worthwhile for an employee to stay around for a long time and make a career there.”
Finally, and perhaps most importantly, be honest, trustworthy and ethical.
“Now's the time for all of us to deal honestly with one another,” Ryan says. “Integrity is of the greatest importance. People need to be able to trust one another in business. We've heard comments about corporate greed, about excessive pay, about all sorts of irresponsible activities. The reality is it's about personal responsibility and integrity. One of the great things that's come out of all this is that people are starting to pay attention to that again.”
- Listen to our conversation with Ryan in its entirety as part of this CPA Spotlight podcast.
- Subscribe to our podcast here, or search for “CPA Spotlight” in iTunes.
What are you doing to position your company to thrive in the post-recession world? Think about it, then check out these related resources:
- Surviving the economic downturn with Frank Ryan, CPA
- Economic recovery's in the air. Can you smell it?
- The MACPA's Economic Crisis Resource Center
Business strategy at the Expo
Ryan will be among the presenters at the second annual Maryland Business and Accounting Expo, scheduled for June 16-17 at the Baltimore Convention Center. Get complete details and register for this groundbreaking event here.