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Surviving The Coming Recession: A Letter To Young Entrepreneurs
Jack Garson Published on Forbes.com
As Published on Forbes.com
By: Jack Garson | June 30, 2019
Dear Business Owner,
I hope this letter finds you and your business doing well. Even if everything’s great now, it’s not going to last. Winter is coming.
Recessions happen. We’re due. Are you ready?
You may be doing great today, getting a lot of clicks or tweets or shares or whatever seems to be quite important nowadays. But things change dramatically when recessions happen. There’s a big difference between having a bad day and hitting the recession-wall. An architect-client put it well shortly after Lehman Brothers filed for bankruptcy on September 15, 2008: “The phones stopped ringing and all business—new and old—ground to a halt.” That quiet lasted for many months. For plenty of businesses, it lasted years. Some have yet to see the good old times. If you haven’t been through a harsh recession before, it is hard to imagine the situation and harder still to plan for it.
So let me get your business preppers started.
First, fix your paperwork. When times are good, businesses focus on doing deals and making money. They obsess over design, marketing and sales—and the curated artisanal donuts in the employee yoga bar (yes, the ones with the turmeric and CBD sprinkles). Sometimes, though, the boring stuff is critical. A good contract can get you paid and keep you in business. A bad one can blow up your company. Recessions often show you which one you have. So, prepare. Make sure your contracts comply with the law—otherwise you may have liabilities, not legal rights. Then, get your customers to actually sign and return the contracts. Plus, save your contracts in a way that you can find them when you need them! It’s simple advice, but it’s overlooked more than you can imagine.
As Warren Buffet says, when the tide goes out, we see who is swimming naked. When the Great Recession hit, a lot of big banks turned out to be skinny dippers. Before the financial fiasco, lenders practically used t-shirt cannons to shoot loans at borrowers. Once the doo-doo hit the Roomba (or vice versa), lenders tried to get their money back. That’s when they learned it sucks to ignore the boring stuff. The banks got jammed up in courts for years because their loan documents were a mess—some weren’t signed, some were missing and others didn’t comply with the law.
ABOUT JACK GARSON
Jack Garson’s practice focuses on Real Estate, Construction, and Business law. He serves as a legal advisor for numerous local, regional and national companies, focusing on business, commercial real estate and construction law. In addition to providing legal counsel, Jack serves as a strategic advisor and negotiator for many clients, providing guidance on issues such as the growth and sale of businesses, liability and risk reduction, hiring and retention of key personnel, protecting and enhancing profitability, and negotiating the resolution of complex commercial disputes.
Jack has successfully negotiated commercial transactions, ranging from the purchase and sale of multi-million-dollar businesses to the structuring of nine-figure construction contracts, and the sale and leasing of commercial properties throughout the United States.
ABOUT OFFIT KURMAN
Offit Kurman, a full-service AmLaw 200 law firm with offices throughout the East Coast and in Southern California, serves dynamic businesses, individuals and families. Founded in 1987, the firm’s 280+ attorneys counsel clients across more than 30 areas of practice. Offit Kurman helps maximize and protect business value and personal wealth by providing innovative and entrepreneurial counsel that focuses on clients’ business objectives, interests and goals. The firm is distinguished by the quality, breadth and global reach of its legal services and a unique operational structure that encourages a culture of collaboration.