Many U.S. readers are perhaps hopeful that, finally, the multi-year devastating recession that has torn into our industry is nearing its end. Canadians so far have escaped relatively unscathed. We experienced a brief (and desperate) shock around the 2008 global financial near-melt-down, but (in part because of differences in the Canadian banking system) managed to avoid the worst of the mess that really hammered the U.S.
However, while no one can experience the pain until you live through it, I had some perception of what things have been like in the U.S., in part through reports from Carolinas publisher Bob Kruhm, who co-ordinates North Carolina Construction News and South Carolina Construction News, but also through my own memories of the nasty multi-year recession in the early to mid 1990s.
I have grey hair now, of course, but then, I had just started my business (publishing my first real estate trade newspaper in 1988) and I will never forget the near-death experience in April 1991, when I thought the story had come to an end — just three years after the business opened. Somehow, I discovered the resolve to carry on, with an attitude of self-reliant responsibility, though things reached near rock-bottom a year later, when a series of “everything that could go wrong, did” events occurred, ?including a run-in with a nasty con-artist, put me near the edge of collapse.
Then, seemingly, miracles happened. The day I had prepared to make a midnight move to escape the con-artist (who had threatened to sue me out of business if I didn’t hand over the enterprise to him), police picked him up and charged him with several counts of fraud. A year later I married the woman of my dreams and my lifestyle improved rather dramatically.
Yet, none of us know the whole story about how rough economic conditions affect others. When our businesses are in distress, we don’t generally broadcast the fact (no need to scare employees, clients and suppliers any more than necessary, after all). We can read the stories in the media, but often the real story doesn’t emerge until years — or even decades later.
For example, I had the privilege of meeting a manufacturers’ representative at a recent construction industry event that I co-ordinated. I also knew that a partner in a major building supply retailer in town was also there — so thought the two would be able to converse and do some business. (I need to be vague about specifics here because this story is somewhat negative, and I have a policy to never negatively identify individuals or organizations in this blog.)
The manufacturers’ representative said: “Oh, I know them (the retailer)”. Then he described how he owned a competing building supply retail business that had competed with the other organization. “I lost everything in the (1990s) recession he said. “I learned the other company was just one month from going under, as well, but survived after my company failed.” He tried to restart his business later in the decade, but the second effort failed, so is living out his career as an employed sales/technical rep for the manufacturer.
Meanwhile, at another event, I sat next to a successful, well-established trade contractor, who had invited a couple of employees that had worked with the company since its start, about three decades ago. Impressed, I asked how the business had been able to survive and retain such key people. The owner didn’t hesitate to say that things weren’t always so good. “We’ve had harrowing times,” she said. “The thing we did differently is that when times were good, we didn’t spend all our money — we saved the cash — so we had some reserves when things weren’t so good.” She, too, recalled the agonizing multi-year recession.
In making these observations, you might be tempted to try to dissect things and try to learn why some businesses have survived incredibly hard times, and others have failed. We could answer with the cliches associated with good business: Sufficient cash, perseverance, adeptness, and the ability to capture new trends (and let go of failure.) But there are other elements to this story, including the importance of luck — and the fact that the economy can bounce around like a yo-yo, and while there may appear to be patterns and trends, sometimes you can build your perceptions on assumptions that can go very wrong, very quickly.
Most important to me, I will not moralize about success or failure in business. Of course, I enjoy reading the success stories, and sharing them, but also respect that we need to be careful about assigning blame for failure. While good practices and a positive spirit can certainly improve our odds for success, some things are beyond are control, and others are defined by circumstances for which we have nothing but our own good or misfortune.