Editorial
business
“Nobody knows how long the economic downturn will last, but what
“The bottom have experience are
of the cycle is a
we do know is that no recession lasts forever and that there will be an
better off. Go work for
really good place
upswing. During this intervening time there will be a lot of consolidation
someone else for a few
to start a business,” years, fill in the holes of
says Ron Wuensch,
in larger and smaller companies.”
your education and
a colleague of
Paul Danos, Dean of Tuck School of Business at Dartmouth”
keep working on your
Steppe at UH business plan,” Steppe
Bauer, “because says. “And narrow your
when you start off focus. Energy and
on an up cycle, your assumption is that this level borrowing money, it needs to be paid back over technology-based businesses, for instance, are
of profitability is going to go on forever.” Same the life of the asset you’re buying. Don’t take out two fields that will continue to have needs even
with this one a 12-month loan assuming you’ll be able to as the economy falters.”
During economic downturns, competitors’ borrow at five percent or borrow at all when it Remember that the most successful
failures present an opportunity, and good business comes due.” business people are highly adaptable. “That’s
people can exploit this, often by buying the failed Wuensch adds: “Really get to know your the heart and soul of being an entrepreneur,”
company or hiring top employees left without a customer. Rip out your answering machine, step Wuensch says. “Reading the environment and
job. Smaller businesses can fall back on ruthless up your service and ask what they need. reacting to it is what an entrepreneur does.
business practises, which may be the best way to Understand how your target customer has Figure out your position of strength, make good
see it through. Dean Danos says, “There will be evolved.” In general, Steppe adds, it’s best to solid decisions based on your position of strength
a lot of consolidation going on over the next target high-end or budget buyers: “the middle and the odds really are in your favour.”
time period. I think small businesses should try is gone.” As the old adage goes, the bottom line is
and stick it out, but some amount of the bottom line and looking after that will
consolidation is inevitable.” Risk Taking occupy the next year or two for many small
Weunsch advocates a serious tightening of Entrepreneurs are risk takers, by definition, but businesses. Dean Paul Danos says, “Nobody
the belt: “Cut back on everything, be cruel and now is not the time to be launching new knows how long it is going to last – maybe a
heartless about what you need to be in business. businesses without the deepest conviction and year, eighteen months – but what we do know
Get rid of everything you don’t need. Know most thoroughly researched business plan. With is that after this cycle is over, things are going
exactly why you borrow what you do. With a finance harder to find and higher than the usual to be different. It will be more regulated and
change in economics you have an opportunity to 90% of new businesses going under within the banks are going to be looked at a lot more
really look at your business, and adjust it to the first three years of trading (noting that most of closely so that they aren’t investing so heavily
next economic reality.” these will do so due to cash flow problems), in such risky areas.”
Core to this principle is remembering the you’ll need a watertight plan to convince For SMEs, the near to middle future may
basics of sound business, such as never borrowing financiers to give you money, get your business be the riskiest time of all. It will take brave
money on a short-term loan if you aren’t really started and think about turning a profit. owners and entrepreneurs to stick out the
able to repay it until the long-term. “Forget that So what’s the alternative? “Consider the storm, yet for those who do so successfully, it
you’re a financial genius,” Steppe says. “If you’re intervening months or years as a gift. Those who could be the most profitable of all.
16 TopMBA CAreer Guide
www.topmba.com
TopMBA CAreer Guide
www.topmba.com 17
MBA_SPR09_pp_001-051.indd 17 17/2/09 15:51:09
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177