I read an interesting article in the paper Tuesday morning that highlighted one of the major hurdles Canadian companies face in a recession.  Cash-flow, and the ability to borrow money to expand or improve.  Over the last few months I have talked to a number of Canadian companies that are running into this problem. To compete long term, they need to have money to invest now. If they do not improve productivity they will loose market-share to off-shore companies expanding into Canada.  Add to this, the number of Bankruptcies and plant closures in North America has introduced a unprecedented number of nearly new equipment - some brand new still in the crate - at bar gin basement prices.  So it only makes sense to improve your productivity and lower the Return-On-Investment.

Tip:    To be able to compete in the global market place a company must Continuous Improve - Definition of "Continuous" in the Encarta® World English Dictionary is: "continuing without changing, stopping, or being interrupted in space or time"  -  There is nothing in the definition about stopping for a recession. 

So how do you tap into the market place to find investment capital.  Well if you have signed contracts or receivables that show you need to expand because you have already sold your "wdgets" and the expansion is to meet that demand; then the Business Development Bank of Canada is likely willing to help you.  Canadian Banks still do not seem to be lending freely.  They seem to be leaning heavily on the side of being Risk Adverse...  Now don't get me wrong, I am not putting the banks down; I understand why the banks have policies in place right now to protect themselves.  There is also Venture Capitalist, who will want a piece of your company in return for the money to expand.  So, like usual as a small business in Canada, you are left on your own to defend for yourself.

You would think the governments would have addressed this problem over the years - it has not changed in my 27 years of working - to make it easier for companies to expand and gain a stronger hold in the global marketplace. This usually means more taxes for the government and new jobs to the country.  Am I missing something - Is this not a WIN-WIN-WIN situation?  Unfortunately, I have witnessed good Canadian companies over the years move to Europe or the Southern United States to be able to get around this situation.

Being in this situation for small companies is not always a bad situation to be in - although, when you are in this situation it can seem insurmountable.  Be creative:  Can you cut a deal with the company selling the equipment?  Can you partner with another company and "Time-Share" the equipment?  Can you get your end client(s) to help pay for the improvement? (Thus adding more value into the supply chain)  There are many different creative ways to approach this situation.  The key, is finding a Win-Win-Win situation -  Sometimes you have to give up something; to be able to move forward.

Tip: Turn to your employees for creative ideas first,  before looking for money.  Yes, you do have creative and smart employees that can help you

If you can't find money to improve, don't give up... what about looking inwards at your current employees.  A lot of time, all it takes is an internal champion to draw out the ideas to improve. If you do not have an internal champion that is good and proven at facilitating a group of people; I strongly suggest you hire a proven Facilitator.  These ideas do not have to cost a lot of Capital money to vastly improve the bottom line, or more importantly add more value to your clients.  After all "Money, Follows Perceived Value"™ 

Tip : A proven facilitator can be hired to facilitate the session for less then $1000

Now is the time; to spend time to improve your operation!  You know your off-shore competitors are spending money on continuously improving their company. If you wait till the you feel the turn around; the chances are, you will be behind the "Eight Ball".  Some off-shore company will be in a better position then you.

For more information on how to improve your operations with-out major capital spending, or on finding proven facilitators; please contact me at sts17@sympatico.ca .

™ -  is property of Meir Electrical & Millwrighting Ltd.

Note: The information contained in this blogg is the opinion of the author and is intended for discussion purposes only.