Area business owners share their recession-beating experiences
Tom Walter gets ideas from his employees. Jennifer Davis saved jobs by off-shoring product development. Dave Nyc cautions to not wait too long to implement changes.
While economists and Wall Streeters debate the technical definition of a recession, entrepreneurs face the challenge of managing during economic rough spots. That's why Walter, Davis and Nyc shared their survival tips at a recent business owners' economic summit hosted by Itasca Bank & Trust Co., then expanded their think-outside-the-box recommendations for this column.
Share information, ask for ideas
Because Tasty Chef President Walter listens to the 20-somethings on his staff, the Itasca caterer is exploring commodities hedging as a way to help control food costs.
That's an idea and a half. In fact, ideas regularly bubble up from Tasty Chef's 100 or so full- and regular part-time employees because Walter shares company information and asks for input. "We show our P&L (profit and loss statement) to every employee so they know exactly what's going on, and we listen to our employees," Walter says. "They have phenomenal ideas."
Among them: A first quarter marketing effort that has focused on CPA firms because they are willing to bring meals in so employees don't have to go out to eat and companies that conduct large training efforts where it makes sense to keep attendees together.
Move jobs to save jobs
Davis Business Solutions Inc., a West Dundee business management software developer, survived its post-Y2K recession by off-shoring product development -- a move that allowed the company to save jobs.
For Davis, who founded the business with her brother and is vice president of the 22-year-old firm, the decision to send software development to, initially, China, then Calcutta and finally to Davis Software Solutions Pvt. Ltd. in Hyderabad, India, came because "We didn't want to eliminate jobs. We had a big obligation to our employees, (basically) the same group that started with us. We had to cut costs so we could keep everybody working."
If you were there, you likely remember the anxiety as businesses pushed to purchase Y2K compliant software before the calendar changed from 1999 to 2000. The rush of business shattered the normal software purchasing cycle. "Companies usually bought software every seven years," Davis explains, "but 30, 40 percent of the market bought early because they were not Y2K compliant."
Consequently, she recalls, "Nobody was buying" in 2000 and 2001.
Make decisions, create revenue
NNT Corp., an Itasca company that sells tooling to manufacturers, is better off now than it was when the 2001 recession hit, and Nyc brothers Dave, president, and Mike, vice president, "waited too long to implement changes. Don't get fat," Dave says. "Make the hard decisions."
Although the brothers reduced headcount, the Nycs key decision may have been to bring in new sales people to create new revenue. Today, NNT does more business with less people, and the brothers "expect to be fine during the slowdown."
© 2008, 121 Marketing Resources Inc.