SURVIVAL - MASTERCLASS:Business is a tough environment in a recession but there are ways and means of making the most of a difficult situation

THERE ARE no magic formulas to help businesses survive the recession but there are ways of making the best of a bad situation. Key to this is being more disciplined with the resources at your disposal, more rigourous in establishing the priorities for your business, more willing to grasp opportunities and look for new business from non-traditional sources.

At this point in the downturn it is all too easy to be pessimistic about the future. However it is worth remembering that even in the Great Depression of the 1930s, three-quarters of the US workforce still had jobs. Indeed many people became wealthy from identifying new business opportunities.

The retail trade is one of the first sectors to feel the drop in consumer spending and menswear retailer Louis Copeland says while business is down around 25 per cent, he has not closed outlets or made any of his 80 staff redundant.

"We had 15 good years so we had a bit put away which will hopefully see us through this," he says. "We haven't introduced wage cuts but sales are down so commission is down too and this affects what people take home."

Copeland says staff have been using the slowdown as an opportunity to update their customers data base. "Salesmen have been phoning customers and getting up to date contact addresses and emails," he says. "There's nothing like a personal call to make customers feel valued."

Copeland has also been pursuing new niche business opportunities. He invited a number of image consultants and personal dressers (who buy clothes for other people) into the store for a presentation on how a suit is made, the different cuts and how a good suit should fit.

Copeland says "dress down Friday" is one of the casualties of the recession. "People had become less interested in their appearance during the boom and 'dress down Friday' had started extending into the whole week," he says. "Being dressed down does not give the impression of professionalism - it just looks sloppy. By extension it suggests that if you're sloppy about your dress you're sloppy about your work. With jobs thin on the ground people need to take how they dress for work much more seriously."

With money tight, companies are not even spending on items that might help improve their efficiency such as new software. Gerry Kerr, managing director of CD Soft, says spending in the SME (small to medium enterprises) sector completely collapsed in the first five months of this year.

"The banks have not been lending in spite of what they say," he says. "They get around it by saying that companies must be 'viable' but most companies out there don't meet their narrow definition of viable. Customers want to order but have not been able to get finance. This has had the biggest impact on our customers."

CD Soft has cut staff numbers and wages to weather the recession, but Kerr says June picked up a little and he is hoping the bottom may have been reached.

"We've been coping by being very reactive to market situations," he says. "We've been taking specific incidents and targeting customers for whom they're relevant. For example in response to the recent security alert over laptop theft and lack of encryption at Bord Gáis, we offered customers a complimentary security assessment and information on encryption."

CD Soft also came up with cost-savings options for its customers. For example, it targeted customers using a specific accountancy package and showed them how it was possible to refine this package to save between €500 and €1,000 in paper processing costs.

CASE STUDY: Fully equipped to make it through the downturn

JIM LEYDEN set up business equipment specialists Bizquip in 1984. He had a background in sales having honed his skills the hard way, selling encyclopaedias door to door.

He decided to set up Bizquip when he discovered a Japanese photocopier manufacturer, Ricoh, was looking for a new Irish distributor. He recognised a good opportunity when he saw it and within a week had re-mortgaged his home and set up his company. Today it employs 52 people.

"What's different about this downturn is the unprecedented level of uncertainty," Leyden says. "I'm 25 years in business and have survived difficult times, wild currency fluctuations and interest rates of 19 per cent. But as a nation we're great at blaming other people for our misfortunes.

"We need to be more like the Americans with their 'can do' approach to everything."

Leyden's business has suffered in the downturn and the company has made eight people redundant. Those remaining have taken a pay cut.

"People are naturally very worried and anxious and this can become all-consuming," he says. "The problem then is that focus is lost at a time when it's needed more than ever. Part of my role is mentoring staff to reassure them and to keep them motivated."

Leyden recognised there were problems ahead last autumn. He shed staff and discontinued the use of outside contractors. Outsourced functions were brought back in-house to cut cost and give Leyden more control.

Bizquip has three main strings to its bow, capital equipment sales, equipment servicing and office supplies. Leyden recognised that the level of uncertainty was making people reluctant to make decisions in areas such as capital spending.

He accepted that this side of his business was going to suffer and made sure servicing and supplies were being tapped to their full potential.

"On the capital side we were suffering because our customers were finding it difficult to secure leasing funding. To try and help we approached Bank of Ireland about clients who were in the market for funding.

"They were very supportive and we did some significant financing through them. At our annual bank review we asked for an increased overdraft on the grounds that while we didn't need it now we might at some point and wanted it in place."

Bizquip has also installed new CRM software which Leyden says has been valuable in reactivating old accounts and providing valuable data on buying patterns.

"Some of our customers who typically spend on capital items may not see us that regularly but the CRM is now prompting us to phone them and remind them we're still here," he says.

JIM'S TOP TIPS

- Keep up appearances. Don't let vans, premises or staff uniforms get scruffy.

- Keep in touch. Let customers know you're still there.

- Target sectors less affected by the downturn.

Business equipment specialists Bizquip have been in operation for 25 years. The company has survived difficult times before, says Bizquip founder Jim Leydon, and it will survive them again. It's all about maintaining focus

Tips for survival - Six steps to keep towards better business

1 KEEP YOUR FINANCES IN ORDER

Never forget cashflow is king. Even if sales figures appear healthy, it is cashflow that counts. Be persistent with your debtors. It's the "squeaky wheel" that gets attention. If an invoice is outstanding make the calls and send the statements. Shed unprofitable customers or those who don't pay their bills.

2 CUT COSTS

Postpone all non-essential purchases and look at ways of reducing order sizes, for example, order smaller amounts regularly instead of facing a hefty bill for a big delivery.

3 KEEP EMPLOYEES ON SIDE

Talk to staff, even though the natural instinct is to clam up. Employees will already know there are problems. Nip potentially undermining idle chatter in the bud and tell them what's happening. They may well have useful ideas to share.

Make sure sales staff are up to the job. The salesperson who can close deals and wrestle additional margin is worth their weight in gold. Make sure they have the training they need to do the business.

4 TUNE IN

Talk to your customers and find out what they really want and need. People are looking for low-cost alternatives and if you cannot provide them others will.  Find ways of re-engineering your offering and have a detailed grasp on your costs so you can offer discounts and still make a profit.

5 MANAGE YOUR TIME

Don't let the day be run by whatever comes at you. Decide on urgent and important priorities and focus on achieving them. If you have a system that allows you to collect data about your business on a daily basis, use it to identify patterns and react faster to changing situations.

6 STAY POSITIVE

Your attitude has a direct impact on everyone around you, including customers and staff.