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Tips for weathering the downturn

by Jeb Bing

There's nothing like a recession to make business owners large and small think about how best to maneuver through economic quicksands and come out relatively unscathed on the other side. Steve Siner, newly-elected to the top job as Managing Shareholder at Hoge Fenton Jones & Appel, has worked with clients in troubled times during his 30 years as a lawyer and has strong opinions on what we should do to make it through today's challenges. Siner admits it's a cliche but he firmly believes that challenges can also be opportunities and that Pleasanton businesses, entrepreneurs and property owners can stay viable in all that we're facing. Have no doubts, Siner reminds us, these are extraordinary times that few with business plans ever envisioned. In fact, those with business plans which were likely written in better economic times should pull them out and update now.

First, businesses need to become lean and mean. If there are 12 employees on board and the ship can only hold 10, two need to get off quickly before the ship goes down. It's not easy to pare staff, but Siner says that's what businesses must do to stay profitable. A mom-and-pop-owned dry cleaners, for example, might be able to reduce hours to still adequately serve its customers without an extra hand, stuff a few more garments in a delivery bag, and even cut energy costs by bunching up batches in the cleaning process.

If there's money in the bank, keep it there even if plans to add a new wing to the showroom floor are in place and a contractor hired. No one knows when this downturn will end and that cash reserve might come in handy to weather a four-to-six month cash shortfall if conditions worsen. The building addition can wait. That's what Nordstrom is doing with its plans to expand at Stoneridge Shopping Center, what Safeway is doing with its plans for a superstore at Bernal and Valley Avenues and Hendricks' Automotive in delaying construction plans for a new auto mall on Staples Ranch. All three have moved forward to get final city approvals on their plans so that they're ready when their markets improve in 2010 or beyond.

Siner considers today's economic downturn as an upturn for renters and mortgage holders. A real estate broker for 16 years as well as a highly regarded lawyer, including 23 years with his late father Bernard in the San Jose law practice of Siner & Siner, he considers 2009 a renters' market like none other he has ever seen. For downtown businesses still trapped in 2007-era rents, they need to renegotiate with their landlords or move to vacant retail spaces elsewhere. Pleasanton has abundant vacant office and commercial properties with many owners willing to work deals so that they can pay their own bills. For property owners, Siner recommends checking their assessments. He's seeing companies reduce their property taxes by $10,000-$20,000 through readjusted assessments. This is also the time to go to the bank and negotiate more favorable terms on a mortgage. Many banks are receptive to working with their established customers to keep their loans so that the bank's auditors can see a future-focused, secure package.

Finally, Siner urges businesses, especially retailers, not to take the seemingly easy path of cutting all expenses, including advertising, promotions and sponsorships. Customers need to know you're still there, still offering value for their money with quality goods and services they need more than ever as expendable income shrinks. Don't sacrifice the short term to get to the long term, Siner warns, or there may not be a long term. Retailers are short-sighted when they freeze promotional dollars needed for business development. Sure, these are unprecedented, "even horrible" times, he counsels, but they won't last forever. A 23-year resident of Pleasanton, Siner has seen the community go through tough economic times before, but always with a special kind of business acumen that he has found leads to a fast and strong recovery.