As the downturn in the economy continues to make headlines, how will it impact our industry? The laser industry won’t escape unscathed, but we are likely to fare better than most because we serve a broad range of applications, and government spending also helps moderate our cycles. Nonetheless it is time to be conservative, to first cover our bases.
How the downturn will impact the business of your company depends on its specific customers. Companies supplying lasers for producing solar cells or batteries or anything green should have an uptick, whereas companies supplying lasers for automotive plants may not see new orders for a while after the current cycle of new plants are built.
Near-term tactics for established companies
- Gear up for a two- to three-year turnaround
- Trim fat and tune up
- Cash is king
- Keep an eye on receivables
- Hold off making non-urgent capital investments
The goal is to emerge stronger, but first you must survive the drought. Keep an eye on your cash position and the credit worthiness of your customers. Avoid building excess inventory or borrowing against accounts receivables for permanent capital. This is a good time to strengthen operations. Upgrade the organization and put in place the process to improve productivity. Preserve capital by trimming unnecessary spending, reserving sufficient “powder” to make strategic investments such as acquiring a key technology.
…for start-up companies
- Redirect products to serve needs more than wants
- Reduce burn rate
- Cut back to survive under the worst-case scenario
- Strengthen competitive advantages
- Founders should assume business-development responsibilities
Half a loaf is better than no bread at all. Investment capital will be scarce for a while, so you want to complete your current round of financing at any valuation. Focus on validating the core value you are trying to create instead of building out the entire business. For example, instead of hiring a vice president of marketing, the technical founders should call on customers. From the customer standpoint, there is no better person to interact with; from the company standpoint, you get first-hand genuine feedback that enables you to make good decisions. The experience you get can benefit you for a lifetime.
…for working people
- Stay calm
- Build a nest egg to cover basic needs
- This is no time for job-hopping
- Find a solid company to work for
- Make quality investments instead of taking undue risks
Capable technical people are always in demand. Never stop learning and always think strategically about how to reinvent yourself. You cannot be complacent just because you have a steady job; make sure the company you work for is going places and you are taking on new responsibilities.
- Stay in school
- Work for a solid company
A slow job market provides a good reason to get an advanced degree, which gives you entre to a broader range of opportunities. And when you graduate, find a well-managed company where you can learn professional managerial skills and are enabled to take on project management responsibilities and develop leadership skills.
Bottom line: I am bullish about the laser industry and I believe that we will emerge stronger. While the exuberant times we enjoyed cannot last, the pendulum swinging the other way makes us focus on basic values. The United States is and will continue to be the strongest nation, but we live in a flatter world. We must think globally when formulating our business and career strategy. It is one world!