10 Tips for Tough Times: Industry Vets Share Advice On How To Weather the Storm

mike lewis

• August 28 2008
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• 10 comments

AS REPORTED IN AUGUST TRANSWORLD BUSINESS:

Turn on the TV or open the newspaper and odds are you’ll be hit by a freight train of negative economic news. In tough times, the media circles at the scent of blood, and concern levels get ratcheted into overdrive. It can be hard to remember that all economic cycles are, by definition, cyclical. This too shall pass, and the companies that weather this storm will emerge stronger and better positioned than ever before. Transworld Business spoke with a number of industry heavyweights who are no strangers to riding out tough economic times to get their advice on surviving the troughs.

1. Think Long Term
Take a two-to-three year outlook on your business—including looking back in the rear view mirror to times of recent prosperity. Sure the economy is difficult and you need to adjust your spending appropriately and be ever mindful of the changing landscape, but you did a lot of things right to achieve what you achieved. Should you rest on your laurels in difficult times? Of course not. But it’s OK to remind yourself that you and your team have made good decisions and achieved your goals. Keep success in mind. Focus on what it is you do best. This will not only prove good for your business, but it will help you and your team to stay positive and endure many of the economic difficulties that are out of your immediate control.

Steve Tully
President, Quiksilver Brands, Americas

2. Stay On Budget
If sales are not meeting what’s projected, then adjust back expenses ASAP. We have multiple brands, and each one has an annual sales and expense budget. We monitor each brand (as well as the whole) on the fly, and review as a management team twice a month. That’s funny, I actually sound like I know what I am talking about there. It only took us nineteen years to get this dialed. It’s also good to do special perks for your staff in tough times and good times. Lunch here. A six pack there. It’s a must to have good financial managers that you can depend on. Mine kick ass. Shout outs to T & T for keeping it tight.

Tod Swank
President, Tum Yeto Inc.

3. Stick To Your Marketing Plan
[Within the first 18 months of launching their business, Electric endured a scheduled May release that was delayed until July, the burst of the stock market tech bubble, and economic turmoil caused by the Sept. 11 attacks.]

The one thing we didn’t give up on was our marketing, because we were trying to get the message of our brand out—what we were all about. In about the third year, the product started to catch up to the marketing and, as difficult as times were, we never backed off our marketing. We kept our ads. We kept our athletes.
Bruce Beach
Founder, CEO Electric

In the market today, the temptation is to cut back and be influenced by conditions. But at the end of the day, you have to tell your story. That’s what you, your fan base, your consumer, and your accounts are really counting on. Most of us are wholesalers, and we hand our baby over to a third party. It’s our responsibility to make sure that the message is clear and concise.

Dan Levine
President, RVCA

4. Look For Opportunity
This isn’t always easy. There’s a natural instinct that says cut orders and put off investing in the business. But that can lead to slow death. There’s just too much solid competition out there. Shifting assets away from the weakest links of the business while doubling down on the strongest may make sense, though. It’s something that should be looked at regularly no matter what the conditions are, but can be easy to neglect when the overall economic tide is high. You don’t want to abandon things without giving them a fair shot, but we all carve out niches over time and if a category wasn’t working in good times, it probably won’t work in bad times.

Matt Patton
Co-Owner, Tactics Board Shop

5. Fine-Tune Your Business/ Focus On Fundamentals
What is especially important here is customer service. In downtimes most companies get grouchy and it clearly shows. Be the company or retailer that looks on the bright side and provides their customers with honest and sincere customer service. When times get better the business will come back threefold.
Even in down times there are hot products. Quite often they are accessories that drive a higher margin. Educate and motivate retail staff to focus on sell through and closely manage the turn for quick replenishment. Work with the brands to ensure there is back up inventory and quick replenishment.

Scott Bowers
Oakley Senior Vice President of Global Marketing And Brand Development

6. Surround Yourself With The Right People

Surround Yourself With People Willing To Go Through The Battle With You. Chances are you and your team are going to work harder for less this year…and maybe next year too. Everyone likes to get raises, cash big commission checks, or get a nice year-end bonus. And if you’ve run successful businesses and assembled a strong team, you’ve shared the wealth in good times. Now times are tough, raises and bonuses may not be forthcoming, and commission checks may be less robust than in years past. In these difficult times the people you want to surround yourself with are those that understand the situation and are willing to grind through with you.
Steve Tully
President, Quiksilver Brands, Americas

7. Embrace Your Retail Partners
Our distribution plan has and will not change by any real measure, so these times are teaching us to find better ways of embracing our retail partner relationships. We hope to work much closer with all of our retail partners by building great products they can sell, supporting them through our marketing and team efforts and bringing that marketing platform into each shop at point of sale.

Rudy Vasquez
Marketing Director, Adio

8. Do One Thing 100 Percent Better
Instead of doing 100 things one percent better, do one thing 100 percent better. And make sure that one thing drives profit!
Scott Bowers
Oakley Senior Vice President of Global Marketing And Brand Development

9. Maintain a Strong Retail Mix
Focus your retail mix on large brands and start-ups. As the industry is starting to segment into larger brands and smaller brands, the lesson to be learned here is to be very careful about what your floor looks like and make sure that as this thing starts to change, you keep a vibrant assorted mix while still supporting the big brands. The smaller brands are great for newness and to have something fresh, but the difference is that they are generally significantly under-capitalized, and they are very unpredictable about shipping goods. There is clearly a message here: you can’t live without the big brands. They’ve been good to retailers and continue to spend the marketing dollars.

Dick Baker
President, SIMA

10. Keep The Faith
I think the reason why we’ve been very successful in these kinds of times is because we did not cut our buying, we did not do anything different, and we kept everything running as if we didn’t know there was anything going on with the recession. A lot of people cut their buying to minimize their stock, but we kept everything going. We’re the only crazy people opening a shop in a recession!

Bobby Adbel
Co-Owner, Jack’s Surfboards