There have been numerous studies where businesses who open or expand during a lousy economy often tend to do better than their competitors when times turn around. I suppose the best way to put it is that the more intrepid step on the gas while the others ease off and cut back. The more intrepid, for their courage, are either rewarded with success or we hear the splat as they hit the all. Either way, it can make for a dramatic story.
In a recent Los Angeles Times article, there was such an intrepid country, willing to expand in this dicey economic climate. The company is Raj Manufacturing of Tustin, a bathing suit manufacturer. It believes it can expand its market share while its competitors are cutting back on operations. Raj is hiring while others are laying off their employees. The company is taking a brand new space that was vacated by a competitor that has gone out of business.
While Raj built its business on manufacturing for luxury clothing designers, it is now developing its own premium in-house line of swimwear. This will mean new customers, and hopefully these are clients that will be able to pay. Which is why it is so important to conduct business research and business credit reports as well as the normal preemployment background checks.
There is no sense in doing business with someone who will beat you for the bill. In this economy, the deadbeats are occurring with increasing frequency. As are the fraud and scam artists. These factors can destroy or damage a burgeoning business, and that would be a shame.
Employee theft is another thing to watch out for. Hire the right employees, those who won’t be grabbing your inventory and selling it for cash to flea market vendors. Employee theft is not only harmful to the bottom line, but it causes a serious decline in morale among the honest workers who resent that the thieves are getting away with it.
So check them out before you hire. And check them out before you ship them.
Meanwhile, good luck to Raj and companies like it. They are the true fabric of our national economic recovery.