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Can businesses beat the
Recession? |
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Like it or not, everyone is facing the heat of recession. And it looks like recession is not going to
go away soon. Small businesses are all the more vulnerable. The question is,
can we to beat recession, and survive?
How to insulate our businesses, as far as we can, from the pains of
slowdown? I have been advising small and
medium businesses for over a decade and a half now, and find that recession
proneness of a business depends on various parameters like the business
sector (agricultural produce vs capital goods),
category of customers, e.g. B2B or retail, urban or rural, etc. Depending on the inherent characteristics
a business may be resilient or more vulnerable to recessions. Even though the fundamental
characteristics of a business cannot be altered, we feel that: o
a business’s
sensitivity to recessions can be measured and graded on a scale of 0-10
(susceptibility test); o
based on the sensitivity
analysis, brainstorming and innovation, the business model can be slightly or
significantly altered and make the business comparatively more recession
proof on the drawing board (Recession Shield); o
the strategies and plans
conceived on the drawing board can be implemented with energy and focus (The
Charge) to actually survive and come out stronger from the recession. Following figuratively describe the three points:
There
can be many strategies. For example, a
capital goods manufacturer, who is operating in sector highly sensitive to
recessions, can launch a free machine health-check campaign for his
customers, which may result in enhanced spare parts sale and service
income. The manufacturer adds value to
the customer in preventing a potential breakdown. The business in the process has moved closer
to the customer and aligned itself with the success of the customer. This is a time tested
strategy employed by automobile service companies. Leveraging
the existing customer relationships for more business by augmenting the
product offering could be another strategy.
In fact one of our clients had implemented this successfully. The client is engaged in design,
manufacture and commissioning of cooling towers for power plants and process
industries. The business added
chilling plants and water treatment segments to tap more business from the
same customers, who otherwise go to third parties for these products. Process It
is indeed a simple, three step process, as follows: Yes,
recession is painful, but I think one can innovate and improve the chances of
survival and beat the recession. |
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