2009 04 02 surviving recession- v02

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A Practical Approach

March 2009


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urviving Recession: A Prac cal Approach

Start now, while you

have me to

look beyond the

obvious.

Are you worried about making it

through the economic downturn?

Its not a question anymore whether weare in recession. Yes, We are !! So the

question now is how to come out of itwith little bleeding.Our research and experience showsthat standing still & doing what youhave always done will hurt businessesin the long run.

Change is the critical elementto surviving a recession.

ecession creates opportunities for business managers to look at their business differently, to make toughdecisions that probably always neededto happen. There is now no room for complacency and for doing what youalways did. Its time to shake off theworry and take a hard look at your business.

Studies have shown that recessionsare the best time to step up your competitiveness. Companies havetwice the opportunity to change their relative position in an industry during arecession compared to growth times.

So, if change is at a premium,how do you jump start itduring a period where mostmanagers just want to puttheir heads down andget through this ?

Start the process now. If you wait untilyou see actual volume declines in your sales reports, the recession will havealready begun, and you will be under enormous pressure to act immediately.No one thinks as clearly when he/she is already in crisis. So start now,while you have time to look beyond theobvious.

What is working for your businesstoday? Where is your business leakingcash? From products and services to staff,this is not a time for a free ride. Abusiness manager needs to thinkcreatively about how and what theycan do to make the recession anopportunity rather than a place toslowly fade.

Any business owner can be forgiven

for what they dont know. hat theywill regret is not taking steps to

discovering the vast range of new andexciting opportunities open to all. Mostcompanies who gain ground duringrecessions keep it later, and most wholose ground do not regain it later. Morecreativity, not less, can determine whichcategory you fall into!!

Where do you start ? First of all you need to have a target,

a road map and the right tools to getyou there. ithout them you will besearching for a needle in the hay. Dontrely on old practices to get you out of the mud. hat worked for you beforewill not help you now, as the rules of the game have changed.

To help you get started, we haveidentified 7 pillars that would resistrecession and even help servicescompanies grow. They are the7 ROX of Growth . This model willhelp you discover the possibilities aswe know we have the answers yourelooking for


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1.Sales and Prot Growth

Whats your plan for increased sales? Most business doesnt have one or theplan is loosely we just need moresales!Two things could make the differencebetween survival and bankruptcy:1-How we attract clients to us(marketing), and2-How we persuade them to dobusiness with us (sales).

You just need to take a hard look atthe sales and marketing activitiesyou are doing. If you are a small firmthat generates most of its businessthrough network-based activities, thenmake sure that your marketing and

business development activities areworking hand-in-hand to maximize your

investments in programs that make themost sense - like intimate gatheringswith active follow-up vs. broadcastmarketing activities.

If you are a larger firm with multiplepractices and global reach, continuingto develop great intellectual capital,disseminating it smartly andensuring that you continue to build

brand recognition, remain strategic.eallocate your marketing and

business development activities tomatch both the industry sectors thatare doing the best during this recessionand design the right messages given

the economic backdrop each industrysector is operating within.

Increase Sales Performance... You need to measure salesperformance and measure it fast!Measure sales by market sector,service line, client, project, sales,persons and team. Measure it weeklyand put charts in key places in your office.

un sales and resource meetings on a

weekly basis and make sure that everyopportunity is taken and all availablestaff are billing, recognize and rewardperformance. See how sales willgrow!!!!

ProftGrowth

PriceAdjustment

CostReduction

SalesIncrease

Measure sales indicators by different sectorsand lines of services

Measure your sales on a weekly basis

and analyze recovery performance

Examine overhead costs andreduce costs that are not salesrelatedCosts related to Marketing & Salesshould remain intact

Analyze previous financial statements

Extract ratios to benchmark against market trend and

competition

Recession does not mean youcannot increase your rates

Compare your prices to themarket, and increase them if

you are under-selling


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ush Your Prot to 20%...

Without profit you will run out of ash quickly.

nalyze the last 2 years profit and lossatement in detail and identify profits.hats its level and trend? Is it greater an 20% - the industry benchmark?entify the levers that would increaseto 20% like fee rates, utilization,laries, associate costs, and

verheads. Measure them monthly as aam and aim to get to 20% as fast asossible.

0% provides a cushion that will protectou against unexpected sales losses inrecession.

et Your Gross Margins tover 50%...

Measure your Gross Margin...

should not be below 50%. You canford to drop up to 10% in under-ilized staff, leaving 20% for overheads

and 20% for profit and a margin for error in times of trouble.

Cut Down Overhead Costs...

What do you think is easier todo? ...

reduce your expenses by 5% or doubleyour sales? Most would agree thatreducing expenses might be easier.

hy then do most business owners

spend little time on attempting toreduce expenses? Consider this: Your current profit margin is 5% - if youreduce cost by 5% your profits double!Of course, you can do the same thingby merely DO BLING your sales!

ight.

Examine your overhead costs for thepast 2 years and critically challenge

them. Focus on costs like offices,expenses, administration that dontgrow sales. DONT C T sales andmarketing costs you will need theseto keep growing or maintaining sales.Develop a plan to reduce the rest in

order to maintain or improve profits.

Increase Your Rates...

You want to grow profit and cashflow?

Its time for a price hike. Think you cantraise your rates while the economy isin a recession? ell, think again. First,you should know where your companystands compared to the market. If

you are under-selling your services,increase your rates. If you get your services-value, dont lower your ratesEven, target rate increases for newclients immediately.

1.Sales and Prot Growth


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2. Market Proposition

Make your offer unique and dont compete on price...

W here do your services fall inrelation to the total market?I s this truly the position you want?A re you all things to all people?S hould you move more towarda high-end position (charging apremium for a differentiated service)?O r toward a low-cost position(undercutting others prices but at aprofit, due to high efficiency)?

If you are truly in the middle, youshould examine how well youredoing regularly (with the help of a goodaccounting system).One of the most common areas which

can impact your business stability is theproposition; its presentation, how

you choose markets and the mix of channels used to take the propositionto those markets. A compelling andunique value proposition ( VP) is thepivotal characteristic of a high growthprofessional services business. henyou have this valuable asset, your sales can shoot through the roof. But if its absent, life can be tough while youcompete for the attention of prospects

with more choice than they can handle.Does your value proposition provoke aWOW or a so what effect?

The more unique, compelling andtargeted your value proposition is, thebetter you can demonstrate that your

firm can command market attentionwith greater ease than its competitors

and the higher you can push upyour fees. If youre in the me too zone, then the risk of future profits ishigher because competition risks arehigher and you have to fight harder for business. Quality firms with astrong uniquevalue proposition tendto have robust processes around suchthings as market research, competitor analysis and win/loss reviews.

Notwithstanding your magnetism to themarket, a clear value proposition helpsyou stand out in the crowd when abuyer is hunting for a company likeyours!

Uniqueness

Assess your business position in the market, andconsequently your Unique Value Proposition youare offering to your clients

Develop measurement tools to identify yourmarket trends and competitors efficiency whichwill allow you to distinguish your business

WOW E ect

Command market attention by providing unique,compelling and targeted value proposition

Push up your fees higher as a result

Opportunities

Explore new opportunitiesIdentify your clients' needs and act quickly onthemResearch your clients perspectives, their worriesin the market and offer them your help andadvice


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earch for Untapped Areas...

o you really know what your clientseds are? Do some research andentify their needs; explore newnues and focus on what competitorse not paying attention to.

aybe your clients need to feel likeey have made a difference in theorld. They need to feel connected tohers. hat would it look like if youovided a service or product to your ients that removed a worry and madeem feel better about themselves?

ntil someone else spots it, time to finde next spot...

2. Market Proposition


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3. Management Quality

Seek Assistance and Be Opento Sugges ons...

You may be forgiven for not possessingthe full skills needed to navigate inthese uncertain times. But you will notbe forgiven for not seeking advice...

Get a resource person, a person fromoutside your company and whosurvived a recession. Share your worries with them and listen to their advice.

Hire a Finance Director...

Do you have a finance director? If your answer is NO, go and hire a competentone. If your answer is YES, make surehe is doing what it takes...

Be in Charge, Take Control...

Not everybody on board should beinvolved in developing the companystrategy. This should be the task of theleadership team of the company, andunder your direction. Make this crystalclear to all staff !!

Plan Ahead...

As youll gather from the above, itsimportant to revisit your business plan.During a recession, things get moresensitive. The revised business planwill also help you identify some other areas in need of immediate focus.

If you do not have a business plan,there are strong grounds for doing

one now as changing environmentalconditions are likely to result in more

difficult times for everyone.

A business plan can help you reassesskey activities, focus minds (and indeedresources) and help you manage creditmore prudently.

ecessions have always been part of the economic cycle and are typicallyshort-lived. It is not a time for rash

decisions, but time for a brief pause toreassess the current so the path tothe future can be planned with morecertainty.


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heres no point in winning all thosew deals if you cant provide the skills

d manpower to deliver, so you needenvironment people want to work

, where they get recognition, reward,rsonal development and have fun. If

ou create this environment, then youllmore likely to hire the best peoplekeep your business growing and

duce their desire to leave!

he best kind of loyalty is when both

rties are benefiting. So, if youvecked your key staff into the futureyour firm through profitsharing andare options, then youll have a teamhere all are focused on the equityowth of your firm and its futurequisition.

our people will help you survive.ow is the best time to use your besten. Form small teams using your

ople and start to collect ideas of mprovement directly from your best

ople.

Best people would be the people whoare actually working on the process

floor. This will reduce the fear factor,boredom and idleness from your employees.

4. Employees Loyalty


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5. Client Relationship

Do you have a well managed contact base and low client a ri on?

The best opportunity to sell your services is to existing and past clients.

e all know the enormous costdifference between maintaining existingclients and finding new ones.

Identify your most desired currentclients, past clients and prospectsand plan a deliberate, high-qualityand valueadded marketing and salescampaign. Consider hosting eventsthat will keep your relationships activeand fresh. And by all means call or e-mail themor better yet, see them inperson.

Take the ini a ve and offer reduced or con ngent fees for a xed period and the work will most likely con nue.

The point is that your clients andprospects should be hearing from youon a regular basis and you should be

prepared to say something that willcapture their interest.

So systema cally walk the halls of your clients(at no charge) to meet new

people and uncover new opportuni es.

Besides calls and visits, conduct digitalmarketing via branded e-mail alerts andeven banner advertising on industry or

association web sites that your clientsfrequent.

The next time you travel, be sure tocontact as many clients and prospectsas possible and line up meetings,lunches, dinners, etc. They willappreciate your checking in, and you

just might uncover a great possibility.emember that

Out of Sight, Out of Mind.

DigitalMarketing

Emails

Visits

ReducedOffersCLIENT

Calls

Events


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o you have long term contracts ando bad debt? If a good percentage

your future fee income is securedrough long term contracts (12 monthsmore) with a number of clients, then

oure in the right place.vestors like to see a diverse client

ortfolio with fee income growthlanced across existing clients andw business. Add to that a qualityproach to billing and debt collection,sulting in zero bad debt and low to

zero working capital requirement, thenyou have a very strong card to play with

investors!

6. Quality of Income


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7. Intellectual Property (IP)

Intellectual Property, such as patents,trademarks, copyrights, and trade

secrets are not just intangible legaltools but strategic assets that createbusiness worth in ways no other physical business assets can. IP canbe a companys most valuable asset.Simply put, IP is any creation of themind.

In franchising business, these areconcepts, logos, brand name, product

development procedures, andinnovations.

Failure to protect this IP could leadto theft of intangible assets anddiminished revenues, resulting in weakposition in the market. If fully utilizedand protected, these IP assets cantranslate to fortune and success for your business, big or small.

So discover and protect your IP treasures today.


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You CAN prosper in turbulent mes. Believe in yourself and

your ability to keep your businesshealthy. This recession will end,and the winners will be out in front

leading the way

Be one of them!


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How We May Help you

Who We Are

e are a regional consulting firm withveral offices across the Middle Eastd rapidly expanding. Our team isade up of career consultants with

ternational experience and locallevance as well as internationaldustry and subject-matter expertsith proven track record, thus strikingoptimum balance among creativity,

scipline and practicality.

What We Do

e help our clients to grow andbecome more successful by providingviable insights and realistic solutions tocomplex matters. e provide practical

business solutions in several areasincluding but not limited to Growth,Corporate Strategies, ProgramManagement, Family and CorporateGovernance, Initial Public Offering(IPO), Executive Coaching, Human

esources and Human Performance.

How We Do it

e work on improving our clientsorganization and walk with them sideby side throughout every step of thedesign and implementation ensuring

al is moving in the right direction.e are a firm that delivers solid and

measurable results in a pragmatic way.Hence, we at OX say :

Yes, we are prac cal


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Yes,

info@ roxmc .comwww. roxmc .com

Z K ce

Tel : +966 1 416 2532

+966 1 462 9714+966 5 6666 0662

Fax:GSM:

P. O. Box 295959iyadh 11351 Saudi Arabia

: K ce

GSM:Jeddah, Saudi Arabia

K ce

Tel : +961 1 302 304Sabbah Center, 10WK RRU

Corniche MazraaBeirut, Lebanon

K ce

Tel :P. O. Box 4075 Doha-Qatar

+966 5 6111 7222 +974-6779195

2009 04 02 surviving recession- v02

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