Editor's Notebook: Riding Out the Storm

It’s hard not to get discouraged after reading the newspaper or watching the talking heads on any news program. I won’t be one of those who sugar coats the situation. The economy is bad shape. For five years we have been fooling ourselves into believing we are infallible and getting a false sense of security about the economy.

We have weathered many an economic downturn. Smart companies prepare for these times.

I can remember speaking to a top executive at a major OEM one year ago. He told me that in spite of the unprecedented growth and record orders and backlogs, he could not see an end to the boom. I don’t claim to be brilliant or to have a crystal ball, but even then I said to myself, "It will end."

Reality has set in. The fallout is coming. There will be cancellations of orders, fewer orders taken and challenges down the line from there, especially when it comes to credit needed to purchase new or used aircraft.

But, I am also a firm believer in the American way, the entrepreneurial spirit of our citizens and our resiliency. We have weathered many an economic downturn. Smart companies prepare for these times, knowing that no matter how good things are, at any given moment, things could change.

The Better Business Bureau and many others offer guidelines to businesses for weathering an economic downturn. Among their recommendations are some of the basics of business, but they are worth reviewing as we enter this period of uncertainty.

First, don’t panic. This is Rule One in flying airplanes, but that same calm response to an in-flight emergency can be translated to almost any situation, even this one. Use your analytical abilities to assess where your business is doing well and not so well. Along those same lines, however, don’t delay too long to ask for help if it’s needed. Search for people that made it through similar downturns and ask how they survived. Don’t hesitate to ask for help from more experienced leaders through an organization like the Entrepreneurs’ Organization or the Small Business Administration.

Next, focus on your core competencies. Make sure you continue to offer the best possible products and services to your customers in the areas you are best known for. Look carefully at your business plan and revise based on the new economic circumstances. Consider shutting down areas that aren’t working well or that aren’t profitable. Also remember that the services or products you provide may not be any different from another company. What can differentiate your business is your customer service. Don’t neglect the customer.

Next is a two-step maneuver. Examine your credit and manage your cash flow. Since the credit markets are hurting right now, credit is harder to come by. Look for banks that understand the aviation industry. If you have pursued a relationship with your banker, you will have a better chance if you need their help. If you have outstanding debts, look for creative ways to pay them down — could you barter for services? Look for ways to increase cash flow and aggressively pursue accounts receivable. Look at your pricing and consider new, bundled packages to entice customers. Consider expenditures carefully and delay "wants" like new furniture for your office or remodeling.

Pursue your competitors fiercely. Try harder to set yourself apart from the competition. Get even more customer feedback to see if you can meet their needs better than your competitor. You could even be looking at expansion during the downturn. I remember another large OEM telling me that they used slower economic times to strategically plan in preparation for good times to come.

Last but not least, don’t stop marketing. Now is the time you need to be reaching out to win new customers. Studies have shown that companies that continue to market even in slow economic growth periods do better than those that don’t. Continuing to advertise, attending trade shows, and promoting your company will pay off. Don’t cut your marketing budget but target your audience closely. Look at new, better value advertising vehicles like the Web, email newsletters, e-blasts, podcasts and webinars in addition to print advertising. Please contact Kevin Reinhart, kreinhart@accessintel.com, Becky Duclos, bduclos@accessintel.com or James McAuley, jimediaservices@aol.com if you would like us to help you with any of those opportunities. We wish you the best as we all go forward in the new world economy.