Don't look for things to return to old ways; talking to the customerWith economic uncertainty still widespread and unemployment remaining high, experts are telling business owners they must accept to a new, long-term reality.

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“I think people have adjusted,” Russell Colombo, president and chief executive officer of Bank of Marin, said about the current economy.

He said people are beginning to realize that things are not going to go back to where they were, and this is the new normal from here on out.

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Steve Jannicelli is a senior manager at Moss Adams in Santa Rosa. He agrees there is a new reality and said business owners should look at both the current risks and opportunities.

Business owners need to examine their products and talk to their customers about how their needs may have changed.

“Whether you are a restaurant or an auto dealer, you need to know if you are selling what they want. What matters is the value of your products or services to your clients,” Mr. Jannicelli said.

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Mr. Colombo and Mr. Jannicelli made their remarks at last month's Business Journal Impact Marin conference in San Rafael.

Mr. Colombo said businesses need more thought-out plans when they approach a bank for a loan.

In addition to knowing the primary and secondary source of repayment and cash flow and collateral, he said bankers want to know that the borrower has plans in case of another downturn.

“Bankers are always skeptical,” he said. “It really helps to plan that way because everything doesn’t go as planned. It shows that you have thought through the down cycle.

“Understanding the markets and understanding the challenges that exist are key.”

He said, additionally, that business owners should know their banker. That way, they will understand about expansion of the business and cash flow.

In addition to Mr. Colombo and Mr. Jannicelli, Marin County Administrator Matthew Hymel told the conference the county had already made $28 million in budget cuts in two years, and he anticipates an additional $20 million deficit next year. There is the potential of a $15 million cut from the state.

“That is a $35 million deficit,” he said.

The county has adopted a lower-cost retiree health plan for all new employees and has saved more than $1 million from foregoing or deferring cost-of-living adjustments. It anticipates reducing hours in parks, libraries and other facilities as well as in public safety services.

He said partnering with local nonprofits is one way that Marin and other counties can help fill in some of the services that are taken away.

Mr. Colombo, Mr. Hymel and Mr. Jannicelli agree that while it may be painful now, finding equilibrium in the new economy will help prevent future downturns.

Mr. Jannicelli said people are always asking, “When are we going to be back to where we were?”

“Hopefully never,” he said. “Things were based on a bubble. We are now learning to operate in the new market, and it makes more sense."


Submit items for this column to Jenna V. Loceff at jloceff@busjrnl.com or 707-521-4259.