A Business Plan for Hard Times
A Business Plan for Hard Times
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.
A Business Plan for Hard Times - To learn more about this author, visit James Chan's Website.
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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.
A Business Plan for Hard Times - To learn more about this author, visit James Chan's Website.
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