The Lull before the Storm 
Added : 11th February 2008
"Timing is critical"
Regional advisers warn that the latest insolvency figures may be the ‘lull before the storm’.
Company liquidations for the 4th quarter of 2007, released last week, show a national fall of 2.1% on the previous year’s figures. Whilst welcomed, the results will do little to ease the concerns of many East Midlands businesses who anticipate that 2008 will provide a bumpy ride, with further volatility resulting from the global credit squeeze. Bankruptcies are expected to rise later in the year as many firms struggle to compete in the increasingly harsh economic climate. Although there are no instant remedies, business advisers Cooper Parry suggest there are a number of actions firms can take to help them safely navigate through the stormy waters.
Challenging times present valuable opportunities to re-examine the focus of a business. Cooper Parry Partner and President of the Turnaround Management Association, Tyrone Courtman, explains: ‘In a growing economy, many firms expand into activities that may not provide the best use of their resources and capabilities in the long-term. Organisations must take a hard look at their strategy and determine the areas where their skills can add most value, beat the competition, and provide the greatest opportunities for the future.’
A common reaction to economic downturn is to slash marketing and research and development budgets, but this may provide false economy. In fact, savvy managers often maintain their advertising expenditure and launch new products at a time when competitors are usually quieter. Such actions can frequently result in an increase in market share that lasts well beyond any subsequent upturn in the economy.
Tyrone Courtman warns ‘Timing is critical. By planning ahead and dealing with key business issues now, the range of available options are greatly increased and avoids the likelihood of fire-fighting later.’
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