Those who know what their blind spots are can find opportunities in economic downturn
Savvy business owners are reflecting on the risks and opportunities afforded by the global economic downturn.
“We see opportunities coming at us that we never would have dreamed of six months ago,” Jim Pattison Group owner Jim Pattison told Business in Vancouver in late December. “I’m talking about companies, values, lots of things.”
Pattison wouldn’t reveal what transactions he might execute for B.C.’s largest private company, which is estimated to generate $6.4 billion in annual revenue.
But Pattison believes business owners should not beat themselves up for failing to predict or prepare for the current downturn. He said in his 47 years in business, he has never seen a downturn come so quickly.
Pattison said entrepreneurs should focus on costs and other things they can control in their business.
Helping business owners determine what they can control is a growth industry.
Ferax Consulting Corp. CEO Stephanie Sharp started offering seminars on the topic in November.
She said corporate blind spots could include the risk that:
– previously solid corporate assets could drastically decline in value;
– Asian suppliers won’t get the credit needed to ship materials; and
– corporate lawyers and accountants haven’t sufficiently communicated to protect the company’s assets.
“There are different financial shockwaves coming through the system. We’ve already had a mortgage crisis, a credit crisis, etcetera. There’s more fallout to come,” said Sharp, who has been a lead negotiator on global financial transactions worth more than $10 billion.
“If you have strategies in place that can be triggered so you can respond very quickly to a different environment, you’re in a much better situation than if you just charge ahead hoping that things are going to get better.”
Despite a hectic schedule, Saje Natural Wellness co-CEO Janie Moore attended one of Sharp’s seminars at the Metropolitan Hotel.
Moore’s skin care retailer opened 10 kiosk locations across Canada in time for the Christmas rush. Saje also has five corporate and four franchised stores.
Moore left Sharp’s seminar convinced that, even though she had just increased Saje’s inventory 40%, she needed to raise it more.
That way, she will be protected if suppliers of her products’ ingredients run into financial problems.
“We’ve always had a lower inventory,” Moore said. “[But] we want to have more of a buffer.”
Provident Security CEO Michael Jagger has also instituted strategies to ensure optimal inventory control.
Most of Jagger’s “millions” in revenue come from providing security guard services, but he also sells burglar alarms, cameras and other security products.
He recently re-evaluated all inventory and found that he had too many of some products. He has since recalculated how much of each he needs and implemented a system to identify when to order more.
Instead of going to seminars to reflect on how to spot looming trouble, Jagger decided to split the cost of hiring a consultant with two friends who he knew from the Entrepreneurs Organization.
Jagger teamed up with Nurse Next Door co-founder Ken Sim and Garibaldi Glass co-owner Chris Mobius to hire lean manufacturing expert Jo Suria.
Lean manufacturing abides by the philosophy that spending resources on goals other than creating value for the end customer is wasteful and worth eliminating.
It’s sometimes called Toyotaism, because Japanese carmaker Toyota Motor Corp. has made it an operating mantra.
Metro Vancouver companies such as Delta fireplace manufacturer FPI Fireplace Products International have long used lean manufacturing consultants to ensure optimal productivity.
Said Jagger: “We’re working to engage our team members to understand the philosophy behind this stuff.”Published January 6, 2009 · Business In Vancouver · Written by Glen Korstrom