A ten-point design business plan for recession

Unsure about downsizing, as you prepare for the hard times just around the corner? Ian Cochrane has a ten-point plan to help you make the best of the situation

The years of plenty in design may come to an abrupt end with the recent credit crunch, but we always knew that 2008- 2009 was going to be slower before seeing an upturn in 2011-2012. Just because your business isn’t growing at the rate it was doesn’t mean you can’t be profitable and do well.

It’s certainly a good time to review working practices right across your business and perhaps reduce the size of your permanent workforce in line with future forecasts. While the process of redundancy is a painful one, it can also be totally refreshing, energising and liberating for a business, providing it’s handled well.

To explain what I mean by ‘handled well’, let me outline ten simple rules:

• Act swiftly. As soon as you can see your forecasts shortening and order book falling, make your move. List all of the work you’ve got and all of the work you expect to get, and then cut your cloth to match. In other words, calculate what staff you are going to need to move forward. Don’t be tempted to put off the evil day in the hope that things will improve – the quicker you act, the quicker you can bring about a recovery. Owner-founders find this very difficult and you may need assistance from outsiders who can help steel you to the task.

• It is better to cut deeper. Be very honest about the work you are going to be doing, and assume that a smaller team will be more efficient once the redundancies are out of the way. If you get this right, you could well be calling up your freelances for help in three months’ time. Get it wrong and you will soon be having to make a further reduction in staff. This can have a disastrous effect on morale.

• Get help from a specialist employment lawyer. It is absolutely vital that the redundancy process is handled professionally. A good lawyer will provide you with the relevant letters and templates to ease the process, and make sure that you’re not sued by your employees. It also reassures the staff that are left that you know what you are doing.

• Be honest and caring at all times. Explain clearly to everyone why you are having to reduce your workforce and that you will do all you can to help them find new jobs. Getting rid of friends and colleagues you know well is going to be difficult, but keep three thoughts in your head: pruning the business now is going to secure the future for those that stay; it isn’t your fault that there is a global banking crisis; and it is the role that is redundant, not the person.

• Get people out of the door quickly. This may sound cruel, but the last thing you want is to have former colleagues sitting around writing CVs and phoning for jobs. Give them their cheques and ask them to go home. You can now get everyone together to give them a pep talk on what the plan is for the future – something along the lines of, ‘Gordon Brown may have screwed the economy, but we will pull through this and come out of it as a much leaner, fitter, focused business’.

• Write an action plan. Get everyone to contribute to this. This is a fantastic opportunity to make everyone feel part of the smaller team. Everyone has a role to play in cutting costs (buses, not taxis) and introducing new business (offer a commission). This is also a time for improving people’s skills – in intelligence-gathering, cold-calling, presentations and proposal writing. At times like these, people need to be all-rounders and get out of their comfort zones – this includes owners and directors. Make sure that this process is fun and rewarding. Run a competition for the best money-saving idea.

• Get close to your clients. This is an opportunity to talk honestly to them about your situation and what you’re doing about it. They will respond well to this and, believe me, they will do their utmost to give you more work wherever possible. Don’t feel guilty about this process – remember, it’s happening to them as well. Take this opportunity to spell out your offer, the people who are looking after them and the other areas where you can help them. Leave them in no doubt that you want more work.

• Intensify your search for new clients. Don’t be tempted to cut your new business budget. Take the money you have saved on travel, stationery, phones and so on, and stick it in your new business budget. If you use a sales agency, double their budget and tell them you expect results within six weeks. Make sure the other agencies you work with know you are hungry for work. Call them up and tell them what sort of work you’re looking for. Better still, buy them lunch and tell them face-to-face.

• Pruning leads to new growth. Good times can lead to flabby, unfocused businesses. Reducing your workforce will serve as a wake-up call for everyone and mark the start of the recovery process – these moments are important in the lifecycle of every business and ensure that we, as individuals, all continue to grow and thrive.

• Say thank you. It’s remark – able what people are capable of if we motivate them, and take the time to thank them for all their hard work and effort. I’d like to end by thanking all of my clients for the wonderful experience and learning they have given me over the past 19 years and three recessions – this piece is dedicated to them.

Ian Cochrane is chairman of Ticegroup

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