For businesses in Alberta, the world has changed. The province is facing a deficit for the first time in 16 years. And, amid the economic turmoil of the past year, companies in the province — both public and private — are grappling with how the absence of liquidity and universal belt-tightening will impact their overall performance.
The majority of companies have benefited from the trickle-down effects of the booming oil and gas sector and many haven't experienced a downturn this severe since the mid-1980s. Then, just as now, it's important to have a game plan for how to manage through a recession and to come out the other side in a solid position. Unfortunately, just as the decline of market was fast and steep, many companies are being equally hasty in their reaction. In many industries, companies are introducing short-term cost-cutting solutions, rather than taking a strategic view of their business and then adopting changes that will be sustainable, thus preserving their long-term strategic vision.
PwC has identified some key issues and practical steps that businesses in Alberta — both public and private — should take today in order to position themselves to successfully navigate the rough waters and emerge ahead of the pack. PwC's deep experience in all of the major industries and market segments in Alberta translates into value for our clients. This experience gives us the ability to quickly understand our clients' issues, roll up our sleeves, and offer practical solutions that bring lasting value. Our clients are in business for the long haul and we're there every step of the way with them.
Companies can weather this period by acting quickly and decisively, and making the hard decisions early on. For this, it often helps to have a third-party provide advice on the areas of your business that can yield savings or to put you in touch with the organizations that can help. This advice can range from how to proactively manage costs and eliminate inefficiency within operations, how to take advantage of tax credits that will provide tangible rewards for companies' spending on research and development, how to optimize your enterprise resource planning and supporting systems to give you the real-time information you need, and how to manage the liquidity and capital structure of your balance sheet.
The road ahead for the next 12 to 18 months will have its share of potholes. But there is light at the end of the tunnel. In the past six months, private companies in Alberta have become more optimistic that we might have hit bottom on the economic downturn and 60% also said conditions will get better a year from now, according to an April 2009 PwC survey conducted by Leger Marketing.
Businesses in Alberta are cautiously optimistic about the not-so-distant future and there is likely good reason to be. However, in times of economic turmoil, the goal posts are always moving. In our experience, companies that come out ahead after a downturn are the ones that set up the strategies, practices and systems today that will lead to the benefits they can realize tomorrow.
We know that doing business in Alberta and being successful is a long-term commitment for our clients. Our mission is to offer the same long-term commitment to helping our clients achieve that success.