Tweet

A Business Plan for Hard Times

Written by: James Chan

Article Overview: Carol Aitken tells how she prepared for the inevitable downturn in a business.

A Business Plan for Hard Times

One way to calm your worries about bad times is to structure your business so that it is more likely to survive a downturn. That~{!/~}s what Carol Aitken has done.

Carol and her former husband, a scientist who studied moon rocks, moved to Houston with their five-month-old daughter just in time to catch the 1970s oil boom. Carol didn~{!/~}t know exactly what she wanted to do, but the area was so prosperous she was certain that, when she was ready to go back to work she would find something.

One day she answered an ad in a Houston newspaper that an employment agency had placed for a local manufacturer. She didn~{!/~}t get that job, but soon she got an offer from the employment agency itself. Despite a total lack of experience, she got a job as a personnel recruiter. She did well at it, and rose to the number two position in the firm. More than 50 recruiters reported to her. She was pulling in a generous salary, and enjoyed all the executive perks. But she wasn~{!/~}t really satisfied to be even so important a number two. She wanted to be in charge. In 1979, she left the firm and started her own.

She didn~{!/~}t take any clients with her. One of her former assistants asked to come with her, and she agreed. On the first day in her new office, she found herself with a phone, a legal pad, a pen, and an employee. She was a divorced mother of two with no alimony and no income. She recalls: ~{!0~}I sat there thinking ~{!.~}Oh, God, what have I done?~{!/!1~}

Fortunately, she knew her business, she knew how to write effective advertisements, and the economic wind was still at her back. She found good candidates. She found good jobs. Pretty soon she was doing good business.

One day in January 1980, Carol received an assignment that disturbed her. An oil company executive wanted her to prepare for the outplacement of 20 executives. This was the first time she had been asked to do this. ~{!0~}Recruiters know before most people when bad things are about to happen,~{!1~} Carol says. She figured that she had better batten down for difficult times.

She immediately began to shrink her own office by placing her employees in new jobs. She moved to a smaller office. She started focusing her marketing on Houston-based companies that did much of their business elsewhere. She leased her big house with a swimming pool, and moved into a smaller town house. The rental fee provided a small income, and she could still borrow against the value of the house, if necessary.

By April, the end of the oil boom was announced on the front pages of the newspapers. The Yellow Pages directory shrank that year from five inches thick to an inch and a half. Home foreclosures became commonplace events. The number of employment recruitment companies in the region shrank from 1100 to 100.
~{!0~}I know how to compete in a down market,~{!1~} Carol says. ~{!0~}I~{!/~}m convinced that eight years make a cycle.~{!1~} She believes that for any business to have staying power, you have to be ready for the down times, and not be afraid to take immediate action to cope with them.

Family problems drew her to the Northeast, so she sold her Houston business and took a job in Baltimore. Once again, she was unhappy as an employee, and after a year she was running her own employment agency once again. She wasn~{!/~}t working in a boom town, as she had in Houston, but she benefited from the general good times of the 1980s.

Then in 1990, around the time Saddam Hussein~{!/~}s army invaded Kuwait, Carol saw some danger signs once again. Facing the second down market of her business life, Carol was determined not to be dependent on the regional economy. She looked for a recession-proof niche. She decided to focus on the IBM AS400 computer.

As Carol saw it, while this machine was not the sexiest technology around, it was the bedrock on which worldwide information and communications systems were being built. It was a machine that was generating jobs for programmers, chief information officers and many other sorts of workers.

She began to cultivate relationships with programmers. She joined their society, attended their conferences and volunteered to help organize their activities. She befriended the engineer who developed the AS400. She became a well-known person in this narrow but important field. People will answer her calls and ignore those of other recruiters. And her pool of jobs and talent is worldwide.

Her business has not become as big as it did in Houston, and she has no aspirations for it to do so. ~{!0~}I~{!/~}ve done my empire building,~{!1~} she says. ~{!0~}My ego has been fulfilled.~{!1~} What she has now, she believes, is a small business that has a good chance of surviving.

Related Articles
  Is that Top Producer Accidentally Successful?
  How Your Budget Can Help You During The Tough Financial Times
  Overcoming Obstacles to Your Success
  Why is a work at home business plan important?
  Internet Business Marketing Plan – Promoting For Profit

Article Tags: 1970s, aitken, alimony, downturn, effective advertisements, employment agency, executive perks, generous salary, good business, job, jobs, legal pad, moon rocks, oil boom, oil company executive, outplacement, personnel recruiter, recruiters, scientist, worries



Related Forum Posts
Business Innovation - Hi Simon If you can finish off the Business Plan and think about your strategic direction or how you are going to use your product to convince people it's a great idea, it will set the foundation for your programming project. You see, when you are looking for funding you will need a Business Plan and Strategic Plan that will convince companies to invest into your new idea. Has anyone achieved this idea before using another industry besides health and fitness that you know of? You should also design some mockups as a "preview" for your programming project. This will also help reduce your programming costs as everyone will know exactly what you want if you have detailed mockups already completed including any functionality you require. Starting mockups for websites and software applications on paper is the best way if you're not a guru in graphic editing software.
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
2007 Goals - 1. Web site complete, fully operational 2. Revenue stream from both individual and corporate 3. Business Plan complete 4. Full marketing strategy complete and implemented
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Re: Is A Business Plan A Waste Of Time? - Business Plan or generally work plan (to do list) improves the quality of my work at least 4 times. I have seen the positive results of planning and focus in my online business. And I know from my past experience how uneficient your business can be when you are not doing planning. So I agree that there is a relationship between entrepreneur success and planning.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Selling What Sizzles vs. Delivering Real Value

Induction – your first management job

Are You Fulfilled

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.