SR Panel: Recession-Proof Strategies

Bill Renter
Best Hot Tubs
Farmingdale, Westbury and Windham New York


We have stores that are busy in spring and summer, and another location that is busy in fall and winter. This evens out seasonality to reduce stress in the offseason.

Make sure your overhead is reasonable, and in the event of another recession, we can close one of our stores — this was written into our leases — so we could scale back quickly during a bad economy. It’s commonly called “the good-guy clause,” an agreement that if things go bad, the tenant can end the lease as long as he is paid up and current. The landlord gets his or her space back without involving court, eviction, lawyers and so forth. Everyone wins.

Rene Huston
Patio Pleasures Pools & Spas
owner/vice president of finance, sales and marketing
Sun Prairie and Madison, Wisconsin

Over the past year, we have put a lot of energy into redesigning our showroom experience. The idea was to bring in new, additional products and services that will allow us to sell more to a single customer and diversify. Diversification can help balance things if one area is struggling but perhaps another is flourishing.

I’ve also spent a lot of time doing cost analysis to determine when it makes sense to outsource versus keep a project in house. I’ve found that using subcontractors is often more efficient, especially in a seasonal business.

Although the past few years have treated our industry well, I never take that for granted. I always watch the bottom line and spending closely. The bank account may build up during the good years, and some may find it tempting to spend extra. I’m a big believer in reinvesting into your business, but I also believe in having safety net if times get tough.

Inventory management is also critical. If business goes backwards, sitting on too much inventory can tie up needed cash flow to keep other parts of the business moving while sales have declined. Partnering with a distributor or supplier that allows you to return inventory that doesn’t sell is always a nice option, and I take advantage of this benefit during seasonal dips.

Lastly, we have implemented systems over the years to closely manage accounts receivable and keep them at a minimum. We require a credit card to activate all service orders. That credit card is also used to bill the service within 24 to 48 hours of completion. This eliminates accounts-receivable balances from building up and spending time chasing customers for payment. This system keeps payments/income coming in regularly, and if the economy were to change, the last thing you want is to be sitting on a big A/R balance.

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All business owners have heard “cash is king,” and to keep growing, even in tough times, you need cash to keep things moving — even if your forward is a slower pace than it once was. Forward is forward.

Brian Quint
Aqua Quip
president and CEO
Nine in Seattle/Tacoma metro

We look at and talk about a number of things within our business and within the specific departments — like retail, service, construction and admin — of the business.

 Here are key metrics we examine on an ongoing basis:

Percentage of hot tub sales that are paid in full at the time of sale. This impacts cash flow.

We track on a daily basis the previous day’s cash/check/credit card deposits into our bank, and the current balance owed, if any, on our line of credit. Again, a measure of cash flow.

We track first-call success for our service calls. This tells us how effective we are at getting proper information from customers when we are writing work orders — and how prepared our service techs are (i.e. have the right parts on their trucks) when they head out for the day.

We measure past-due or unpaid invoices. This relates to our service and route-maintenance business. We used to focus on accounts that were 60 days late, and now we focus on accounts that are 30-plus days late. Another cash-flow metric.

We establish monthly (income statement) budgets with each store and department. We evaluate monthly how each department performed versus the budget. This gives managers more visibility and accountability with their own department’s performance, be it good, bad or indifferent.

We evaluate inventory by product category in each location and compare it to previous years. We do this monthly to ensure we are granular and informed on inventory values. This ensures we are managing inventory values deliberately.