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How To Thrive During And After The Recession

07.01.2009

By Barry H. Worth

As we head into the second half of 2009, we have seen a fluctuation in sales figures, interest rates and tax liabilities. Most economists aren’t convinced we’re out of the woods yet.  Even in this unsettled market, if you are willing to plan, there are opportunities you can take advantage of. These opportunities may benefit business owners as well as individuals, depending on your circumstances.

Tax and Estate Planning


This is a great time to do some serious tax and investment and long-term estate planning!  For those holding stock, you may find this is an opportunity to take advantage of losses. You may be able to adjust losses in certain stocks that you have held for an extended period of time or received through an inheritance. With stock prices dropping, this may also be a time for you to rebalance your stock portfolio by purchasing stock you always wanted but previously couldn’t afford.

Business Planning


As a business owner, this is a great time to revisit your strategic plan, solidify your infrastructure and take advantage of new opportunities. Look for new ways of doing business, because old strategies may not work in this changing business environment.

Your business planning could include:


  • Process improvement: making your business run more efficiently and effectively.

  • Acquisitions: there may be opportunities to increase market share as industries consolidate.

  • Customer profitability: analysis may lead to adjusting pricing or shedding unprofitable customers.

  • Profit margins: understand your costs to price ratio in order to maintain the most profitable margin possible.

  • Staffing review: there is lots of talent available now—can you upgrade or take from a competitor?

  • Succession planning: strongly position the company for the next generation

       Our new administration embraces ‘change’ with gusto. This is a good plan for you as well. Look for ways to adjust your business in order to take advantage of the global economy and changing business climate. Some business owners don’t believe they are affected by the global economy. They’re wrong. We’re all affected by it in some way. Remain flexible and open-minded so you can capitalize on this developing business environment.

Succession and Exit Planning


       If this economic challenge hit you as youwere making succession or exit plans for your business, there are still opportunities.  You may find now there is strong talent available for you to bring on board. This economy is an employers’ market. Engage a business advisor to help you develop a strategic direction and a succession plan. This will help build your company, strengthen your management and position the right people in order to make your transition without disrupting the natural flow of your business.

       It’s important to understand that the market place isn’t stagnant. Understand that the current state of our economy is really a correction to previous years of prosperity.  Every financial crisis in the past has had a recovery.  The dynamics of buying and selling business, credit markets and valuations will change. As the market recovers, these dynamics will cause the environment to morph into something different. This is a good time to be thinking about how you can realize and maximize the value of your business.  Because this may be one of the most significant financial transactions a business owner experiences, it is worth the time, planning and investment to make it successful..

       Some aspects of your business will remain the same regardless of the changes occurring in the downturn. Just don’t be afraid to get out of your comfort zone and embrace change. Take advantage of the new and different opportunities that are available. If you can’t determine the best path to take, engage an experienced advisor to help you plot your success.

Barry H. Worth, CPA/ABV, CVA, CM&AA, is a member of Brown Smith Wallace, LLC. He concentrates in financial advisory services, specifically turn-around consulting, transactional services and exit planning. For more information on succession or exit planning, contact Barry Worth at 314.983.1202, bworth@bswllc.com or visit www.bswllc.com.

Reprinted by permission of the St. Louis Small Business Monthly


VOL. 21, ISSUE V   JULY 2009

 

 

 

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