Action Plan Online 2010, Part 3 of 12

Make this a Rosy Recovery

The recovery was always going to be a rocky road. With former economic superpowers saddled with ballooning debt, once insignificant markets becoming a growing presence and previously predictable customers behaving erratically, you have to prepare your business to adjust to the new norms. Here, three ways to stay ahead of the curve.

Invest in R&D
Consumers are acting just plain weird right now – tightening spending on many things yet still buying houses they can barely afford – but on one thing most economists agree: people are spending less. Companies will have become more ambitious to compete for fewer dollars. “Before the recession, everybody became a little complacent…They thought, ‘If I continue to do what I’m doing, I’ll continue to profit.’ In this new, highly competitive environment, Canadian companies need invest more in R&D,” says Tina Kremmidas, the chief economist for the Canadian Chamber of Commerce.

Conduct some acquisition reconnaissance
Acquisitions are a good way to grow quickly, but hope for the recovery may give people who need to sell inflated views of what their company is worth. The best targets are distressed. Find them through your customers, who are probably an under-utilized source when it comes to staying in touch with what’s happening in your industry, says Aroon Sequeira, the Alberta director of M&A services at Ernst & Young in Edmonton. They’ll likely know what companies are in trouble and want out. Don’t neglect your industry associations, either.

Utilize all your resources (especially free ones…)
A recovery can be a luxury for a business that came out strong; it can take advantage of others’ inability to act. With many parts of the world hit far harder than Canada, this may be the right time to make a foreign acquisition or partnership. Sign up for the free Foreign Affairs and International Trade Canada’s e-magazine at international.gc.ca/canadexport, and enjoy seeing your tax dollars at work.

RELATED LINKS
Action Plan 2010 in Print, Part 3 of 12: Review the Competitive Landscape

It’s not easy to run a business during a recovery. Everything you thought you knew about economic growth and consumer behaviour has been turned on end. More >

Appreciating the staff who’ve been loyal

March’s Action Plan Podcast:
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1 Consider exporting to growing markets (many can be found in the Pacific Rim). 2 Look at ways to take advantage of voids in the market left by bankrupt companies. 3 Consider wooing the staff and clients of defunct companies (if it fits your biz model). 4 Play safe – even if opportunity knocks, don’t put your balance sheet at risk.