Business coach David Constantine had some advice for surviving the recession for Stone Federation members at their annual conference in Liverpool. In a seminar called ‘Don’t sink, swim’ he said that while it was important for companies to control costs, they should not neglect their strategies for future growth

Recession tends to turn business focus from the macro to the micro. That can mean those in charge lose sight of the bigger picture – the strategic stuff that’s about the future rather than the day-to-day stuff that is about immediate revenue.

That was David Constantine’s message to Stone Federation Great Britain members at their annual conference in November, held this time in Liverpool.

David, who has an MBA (Strategy & Marketing) from Cass Business School, London, and has formed and run his own companies, is a business coach running his own company, Context Coaching, working with a wide range of companies, including the Stone Federation Executive Committee last year.

Context Coaching is a Commercial Business specialising in building enhanced levels of performance, focusing on both growing businesses and maximising the utilisation of their current resources.

David told the Federation members in Liverpool that one of the common mistakes made by businesses in a recession is to take too long to react.

When times are good companies often concentrated too much on the macro and take their eyes off the micro, employing too many people and reducing profit margins.

When sales go into decline in a recession, companies are too slow to react with the necessary cost reductions that normally involved job losses, which deprives them of the cash needed to invest as conditions improved.

Interestingly, though, when David had earlier asked his audience what they would like him do if he could wave a magic wand to help their businesses, some had said he could find them appropriately skilled people. Others had also been reluctant to make redundencies when they had found it so difficult to recruit skilled people in the past.

The time to invest, said David, is just before the bottom of the recession to give yourself a competitive advantage as trading conditions improve. Of course, determining When the recession has reached the bottom is not easy and different industries have different drivers indicating changes.

Deciding what to invest in also introduces a lot of options, including marketing. “Have you seen any drop off in core advertising?” David asked. “McDonalds are investing now so they are ahead of the game when things start to improve.”

Of course companies will concentrate on the micro in a recession but, said David, if any senior manager was involved in a decision to buy plain instead of chocolate biscuits they should be shot because it was not the best use of their talents.

Senior managers have to be functional and do what they do best, not, if it is something else, what they like doing most. “At this time in this market we can’t afford to do stuff that’s not value adding. You are far too highly paid to be opening the mail.”

Doing nothing is probably the worst business decision of all. “If you find yourself doing nothing and you’re not sure how to deal with it, talk to someone. Just ask. Most of you are facing similar problems, so ask your colleagues; ask your friends.

“If you hold on to that anxiety you won’t be operating at your maximum because you will be worrying. In the UK we have a view that as a leader we should have all the answers. We don’t.”

Of course, when sales fall, firms look for new business and the best place to start is with existing and former clients, said David.

“It’s relationships. How many of you really focus on relationships? How many of you have a list of architects you can talk to? How many of your clients are actively out there promoting you? Get a list of people you know who have a relationship with people you would like to work for.”

That does not just include people in the trade. David pointed out that bank managers know many people, for example.

“What’s not under pressure from recommendations is price,” he said.

It is no good just making contact, though. You have to have a clear message to convey to intermediaries that they can pass on to the people you want to contact.

Normally your message will be your product. If you are an installer, your product is the installation and the message is that you are an A1 installer. “You need to answer this for yourselves: what is it that the client is buying from me?”

As well as the tangible product, there is also an emotional side to selling. Volvo cars, for example, are known for safety. That is the message Volvo have conveyed and it is emotional. Human beings make emotional decisions, said David.

You have to target a certain sector of the market, whether the target is geographical or demographical.

And you have to wrap a service around your product. “Another word for it is style. It’s the experience the client gets when they buy your product.”

The thorn in many people’s side is the price they can get for their products and services, but David said: “If you’re having pricing conversations with your clients you’re not having pricing conversations. They’re talking about price because they don’t know the value of your product.”

He illustrated the point: he had a car he said he would sell to anyone for £100,000. Understandably there were no takers. He explained it was a Bugatti worth £1million. Now everyone wanted to buy it for £100,000.

If he were selling Ford Focuses, he said, he would not be selling the car because that was available anywhere at the same price. He would be selling the best service to make sure people bought the car from him rather than a competitor.

What constitutes the best service? The people to ask about that are the customers. “So go out and ask them.”

Summing up, David told the Federation members that they should look at their businesses in three ways: every activity that generated revenue; every cost; and a strategy for future development.