The more muted effects of the global recession on the local economy is proving something of a predicament for businesses: How much, how fast and where should they be cutting back to avert disaster?
“I think the watchwords that companies should be adopting are: don't panic,” suggests Martin Venter, business development manager at printer distributor Printacom.
He says the most obvious steps are to stick to what you know, manage the business and expenses properly and focus on your existing client base.
“All too often when times are good, managers forget about the small things that can make the business leaner. This would include properly managing cash flow by keeping a closer eye on critical areas such as stockholding and debtors.
“It is far easier to do this to affect a turnaround than slashing expenses in the wrong area of the business,” he says.
A reduction in staff would be an example of incorrect cutbacks, which could prove more detrimental than beneficial to the long-term survival of the business.
“Rather than retrenching staff, businesses could explore innovative ways to generate extra revenue. This could include diversifying the product and service offering or demonstrating how you can add value to your clients' business and help grow their business,” adds Venter.
It is in ICT community portals like MyByte (www.mybyte.co.za) where businesses can gauge a sense of what the market needs are and innovate around those sentiments. MyByte is a meeting place for likeminded individuals working within the ICT space where members can network, share opportunities, exchange information and collaborate on projects.
In this respect, Printacom recently added the Printronix range of RFID bar code and label printers to its suite of OKI line printers. This expands its reach into the industrial printer market and has given renewed focus to this sector of the market.
While it may require additional effort to establish market presence and footprint, it presents an opportunity to diversify in the current market conditions. It is also an effective way to utilise existing staff to build the business.
“While line printers have always been part of our offering, we haven't focused on this side of the business too strongly. This latest development is a major opportunity for us.”
Venter says Printacom's lean structure has enabled it to react quickly to this opportunity and has positioned itself to take full advantage of the market gap. “You have to be flexible to jump at opportunities such as this,” he says.
On the whole, however, Venter believes the ICT industry will emerge stronger despite the economic turmoil.
“I actually think it is good for the industry as the strong will survive. In some ways it will get rid of the players who should not be in the market, which in turn will present opportunities for credible brands and companies.
“The bottom line, however, is that the market is totally unpredictable at the moment and companies have to prepare themselves to adapt to the constantly changing environment,” he concludes.
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