A Practical Approach

March 2009
 Contents
3 ............................................... Are you worried about making it through the economic downturn?

5 .................................................................................................................. 1. Sales and Profit Growth

7 ........................................................................................................................ 2. Market Proposion

9 ..................................................................................................................... 3. Management Quality

10 ....................................................................................................................... 4. Employees’ Loyalty

11 ....................................................................................................................... 5. Client Relaonship

12 ........................................................................................................................ 6. Quality of Income

13 ..................................................................................................................... 7. Intellectual Property

15 ...................................................................................................................... How we may help you

Surviving Recession: A Praccal Approach
It›s not a question anymore whether we
are in recession. Yes, We are !! So the
question now is how to come out of it…
with little bleeding.
Our research and experience shows
that standing still & doing what you
have always done will hurt businesses
in the long run.
Change is the critical element
to surviving a recession.
Recession creates opportunities for
business managers to look at their
business differently, to make tough
decisions that probably always needed
to happen. There is now no room for
complacency and for doing what you
always did. It’s time to shake off the
worry and take a hard look at your
3 business.
Studies have shown that recessions
are the best time to step up your
competitiveness. Companies have
twice the opportunity to change their
relative position in an industry during a
recession compared to growth times.
Are you worried about making it
through the economic downturn?
So, if change is at a premium,
how do you jump start it
during a period where most
managers just want to put
their heads down and
“get through this” ?
Start the process now. If you wait until
you see actual volume declines in your
sales reports, the recession will have
already begun, and you will be under
enormous pressure to act immediately.
No one thinks as clearly when he/
she is already in crisis. So start now,
while you have time to look beyond the
obvious.
What is working for your business
today?
Where is your business leaking
cash?
From products and services to staff,
this is not a time for a free ride. A
business manager needs to think
creatively about how and what they
can do to make the recession an
opportunity rather than a place to
slowly fade.
Any business owner can be forgiven
Start now, while you
for what they don’t know. What they
will regret is not taking steps to
discovering the vast range of new and
exciting opportunities open to all. Most
companies who gain ground during
recessions keep it later, and most who
lose ground do not regain it later. More
creativity, not less, can determine which
category you fall into!!
Where do you start ?
First of all you need to have a target,
a road map and the right tools to get
you there. Without them you will be
searching for a needle in the hay. Don’t
rely on old practices to get you out of
the mud. What worked for you before
will not help you now, as the rules of
the game have changed.
To help you get started, we have
identified 7 pillars that would resist
recession and even help services
companies grow. They are the
7 ROX of Growth. This model will
help you discover the possibilities as
we know we have the answers you’re
looking for…
have me to
look beyond the
obvious.
 www.roxmc.com

Are you worried about making it

through the economic downturn?
Sales and Profit Growth

Management Quality

Intellectual Property
Market Proposition

Employees’ Loyalty

Client Relationship

Quality of Income
4

Any business owner can

be forgiven for what
they don’t know-What
they will regret is not
taking acon!
Surviving Recession: A Praccal Approach

1. Sales and Profit Growth

What’s your plan for
increased sales?
Most business doesn’t have one or the
plan is loosely “…we just need more
sales!”
Two things could make the difference
between survival and bankruptcy:
1-How we attract clients to us
(marketing), and
2-How we persuade them to do
business with us (sales).
You just need to take a hard look at
the sales and marketing activities
you are doing. If you are a small firm
that generates most of its business
through network-based activities, then
make sure that your marketing and
business development activities are
working hand-in-hand to maximize your
investments in programs that make the
most sense - like intimate gatherings
with active follow-up vs. broadcast
marketing activities.
If you are a larger firm with multiple
practices and global reach, continuing
to develop great intellectual capital,
disseminating it smartly and
ensuring that you continue to build
brand recognition, remain strategic.
Reallocate your marketing and
business development activities to
match both the industry sectors that
are doing the best during this recession
and design the right messages given
the economic backdrop each industry
sector is operating within.
Increase Sales Performance...
You need to measure sales
performance and measure it fast!
Measure sales by market sector,
service line, client, project, sales,
persons and team. Measure it weekly
and put charts in key places in your
office.
Run sales and resource meetings on a
weekly basis and make sure that every
opportunity is taken and all available
staff are billing, recognize and reward
performance. See how sales will
grow!!!!

Analyze previous financial statements

Measure sales indicators by different sectors
5 and lines of services
Extract ratios to benchmark
Measure your sales on a weekly basis
against market trend and
and analyze recovery performance Sales Profit competition
Increase Growth

Examine overhead costs and Cost Price Recession does not mean you
reduce costs that are not sales Reduction Adjustment cannot increase your rates
related
Costs related to Marketing & Sales Compare your prices to the
market, and increase them if
should remain intact
you are under-selling
 www.roxmc.com

1. Sales and Profit Growth

Push Your Profit to 20%...
Without profit you will run out of
cash quickly.
Analyze the last 2 years profit and loss
statement in detail and identify profits.
What’s its level and trend? Is it greater
than 20% - the industry benchmark?
Identify the levers that would increase
it to 20% like fee rates, utilization,
salaries, associate costs, and
overheads. Measure them monthly as a
team and aim to get to 20% as fast as
possible.
20% provides a cushion that will protect
you against unexpected sales losses in
a recession.
and 20% for profit and a margin for
error in times of trouble.
Cut Down Overhead Costs...
What do you think is easier to
do? ...
reduce your expenses by 5% or double
your sales? Most would agree that
reducing expenses might be easier.
Why then do most business owners
spend little time on attempting to
reduce expenses? Consider this: Your
current profit margin is 5% - if you
reduce cost by 5% your profits double!
Of course, you can do the same thing
by merely DOUBLING your sales!
Right.
order to maintain or improve profits.
Increase Your Rates...
You want to grow profit and cash
flow?
It’s time for a price hike. Think you can’t
raise your rates while the economy is
in a recession? Well, think again. First,
you should know where your company
stands compared to the market. If
you are under-selling your services,
increase your rates. If you get your
services-value, don’t lower your rates…
Even, target rate increases for new
clients immediately.

Examine your overhead costs for the

Get Your Gross Margins to
Over 50%...
Measure your Gross Margin...
It should not be below 50%. You can
afford to drop up to 10% in under-
utilized staff, leaving 20% for overheads
6
past 2 years and critically challenge
them. Focus on costs like offices,
expenses, administration that don’t
grow sales. DON’T CUT sales and
marketing costs – you will need these
to keep growing or maintaining sales.
Develop a plan to reduce the rest in
Surviving Recession: A Praccal Approach
Make your offer unique and
don’t compete on price...
• Where do your services fall in
relation to the total market?
• Is this truly the position you want?
• Are you “all things to all people”?
• Should you move more toward
a high-end position (charging a
premium for a differentiated service)?
• Or toward a low-cost position
(undercutting others’ prices but at a
profit, due to high efficiency)?
If you are truly “in the middle”, you
should examine how well you’re
doing regularly (with the help of a good
accounting system).
One of the most common areas which
7
Assess your business position in the market, and
consequently your Unique Value Proposition you
are offering to your clients
Develop measurement tools to identify your
market trends and competitors’ efficiency which
will allow you to distinguish your business
Uniqueness
2. Market Proposition
can impact your business stability is the
proposition; its presentation, how
you choose markets and the mix of
channels used to take the proposition
to those markets. A compelling and
unique value proposition (UVP) is the
pivotal characteristic of a high growth
professional services business. When
you have this valuable asset, your
sales can shoot through the roof. But if
it’s absent, life can be tough while you
compete for the attention of prospects
with more choice than they can handle.
Does your value proposition provoke a
‘WOW’ or a ‘so what’ effect?
The more unique, compelling and
targeted your value proposition is, the
better you can demonstrate that your
Command market attention by providing unique,
compelling and targeted value proposition
Push up your fees higher as a result
WOW Effect
firm can command market attention
with greater ease than its competitors
and the higher you can push up
your fees. If you’re in the ‘me too’
zone, then the risk of future profits is
higher because competition risks are
higher and you have to fight harder
for business. Quality firms with a
strong uniquevalue proposition’ tend
to have robust processes around such
things as market research, competitor
analysis and win/loss reviews.
Notwithstanding your magnetism to the
market, a clear value proposition helps
you stand out in the crowd when a
buyer is hunting for a company like
yours!
Explore new opportunities
Identify your clients' needs and act quickly on
them
Research your clients perspectives, their worries
in the market and offer them your help and
advice
Opportunities
 www.roxmc.com

2. Market Proposition

Search for Untapped Areas...

Do you really know what your clients’

needs are? Do some research and
identify their needs; explore new
venues and focus on what competitors
are not paying attention to.

Maybe your clients need to feel like

they have made a difference in the
world. They need to feel connected to
others. What would it look like if you
provided a service or product to your
clients that removed a worry and made
them feel better about themselves?

Until someone else spots it, time to find

the next spot...

8
Surviving Recession: A Praccal Approach
Seek Assistance and Be Open
to Suggesons...
You may be forgiven for not possessing
the full skills needed to navigate in
these uncertain times. But you will not
be forgiven for not seeking advice...
Get a resource person, a person from
outside your company and who
survived a recession. Share your
worries with them and listen to their
advice.
Hire a Finance Director...
Do you have a finance director? If your
answer is NO, go and hire a competent
one. If your answer is YES, make sure
he is doing what it takes...
9
3. Management Quality
Be in Charge, Take Control...
Not everybody on board should be
involved in developing the company
strategy. This should be the task of the
leadership team of the company, and
under your direction. Make this crystal
clear to all staff !!
Plan Ahead...
As you’ll gather from the above, it’s
important to revisit your business plan.
During a recession, things get more
sensitive. The revised business plan
will also help you identify some other
areas in need of immediate focus.
If you do not have a business plan,
there are strong grounds for doing
one now as changing environmental
conditions are likely to result in more
difficult times for everyone.
A business plan can help you reassess
key activities, focus minds (and indeed
resources) and help you manage credit
more prudently.
Recessions have always been part of
the economic cycle and are typically
short-lived. It is not a time for rash
decisions, but time for a brief pause to
reassess ‘the current’ so the path to
‘the future’ can be planned with more
certainty.
 www.roxmc.com

4. Employees’ Loyalty

There’s no point in winning all those Best people would be the people who
new deals if you can’t provide the skills are actually working on the process
and manpower to deliver, so you need floor. This will reduce the fear factor,
an environment people want to work boredom and idleness from your
in, where they get recognition, reward, employees.
personal development and have fun. If
you create this environment, then you’ll
be more likely to hire the best people
to keep your business growing and
reduce their desire to leave!

The best kind of loyalty is when both

parties are benefiting. So, if you’ve
locked your key staff into the future
of your firm through profitsharing and
share options, then you’ll have a team
where all are focused on the equity
growth of your firm and its future
acquisition.
Your people will help you survive.
Now is the best time to use your best 10
men. Form small teams using your
people and start to collect ideas of
improvement directly from your best
people.
Surviving Recession: A Praccal Approach
Do you have a well managed
contact base and low client
arion?
The best opportunity to sell your
services is to existing and past clients.
We all know the enormous cost
difference between maintaining existing
clients and finding new ones.
Identify your most desired current
clients, past clients and prospects
and plan a deliberate, high-quality
and valueadded marketing and sales
campaign. Consider hosting events
that will keep your relationships active
and fresh. And by all means call or
e-mail them—or better yet, see them in
person.
11 Take the iniave and offer
reduced or conngent fees for
a fixed period and the work
will most likely connue. “Out of Sight, Out of Mind”.
The point is that your clients and
prospects should be hearing from you
on a regular basis and you should be
5. Client Relationship
prepared to say something that will
capture their interest.
So systemacally “walk
the halls” of your clients
(at no charge) to meet new
people and uncover new
opportunies.
Besides calls and visits, conduct digital Calls Visits
marketing via branded e-mail alerts and
even banner advertising on industry or
Reduced
association web sites that your clients Emails CLIENT
Offers
frequent.
Digital
Events
The next time you travel, be sure to Marketing
contact as many clients and prospects
as possible and line up meetings,
lunches, dinners, etc. They will
appreciate your checking in, and you
just might uncover a great possibility.
Remember that
 www.roxmc.com

6. Quality of Income

Do you have long term contracts and zero working capital requirement, then
no bad debt? If a good percentage you have a very strong card to play with
of your future fee income is secured investors!
through long term contracts (12 months
or more) with a number of clients, then
you’re in the right place.
Investors like to see a diverse client
portfolio with fee income growth
balanced across existing clients and
new business. Add to that a quality
approach to billing and debt collection,
resulting in zero bad debt and low to

12
Surviving Recession: A Praccal Approach

7. Intellectual Property (IP)

Intellectual Property, such as patents, So discover and protect your

trademarks, copyrights, and trade IP treasures today.
secrets are not just intangible legal
tools but strategic assets that create
business worth in ways no other
physical business assets can. IP can
be a company’s most valuable asset.
Simply put, IP is any creation of the
mind.

In franchising business, these are

concepts, logos, brand name, product
development procedures, and
innovations.

Failure to protect this IP could lead

to theft of intangible assets and
diminished revenues, resulting in weak
position in the market. If fully utilized
and protected, these IP assets can
13 translate to fortune and success for
your business, big or small.
You CAN prosper in turbulent
mes. Believe in yourself and
your ability to keep your business
healthy. This recession will end,
and the winners will be out in front
leading the way:

Be one of them!

Who We Are:
We are a regional consulting firm with
several offices across the Middle East
and rapidly expanding. Our team is
made up of career consultants with
international experience and local
relevance as well as international
industry and subject-matter experts
with proven track record, thus striking
an optimum balance among creativity,
discipline and practicality.
What We Do:
We help our clients to grow and
become more successful by providing
viable insights and realistic solutions to
complex matters. We provide practical
business solutions in several areas
including but not limited to Growth,
Corporate Strategies, Program
Management, Family and Corporate
Governance, Initial Public Offering
(IPO), Executive Coaching, Human
Resources and Human Performance.
www.roxmc.com
How We May Help you
How We Do it:
We work on improving our clients’
organization and walk with them side
by side throughout every step of the
design and implementation ensuring
al is moving in the right direction.
We are a firm that delivers solid and
measurable results in a pragmatic way.
Hence, we at ROX say :
“Yes, we are praccal…”
15
 “Yes, ”


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Tel : +966 1 416 2532 Tel : +961 1 302 304

Fax: +966 1 462 9714 Sabbah Center, 10
GSM: +966 5 6666 0662 Corniche Mazraa
P. O. Box 295959 Beirut, Lebanon
Riyadh 11351 Saudi Arabia

 
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GSM: +966 5 6111 7222 Tel : +974-6779195

Jeddah, Saudi Arabia P. O. Box 4075 Doha-Qatar

info@roxmc.com
www.roxmc.com