WorldWide Drilling Resource®

Drilling Into Money Not Boring by Mark E. Battersby Recession-Proofing Your Business With many financial experts and economists predicting the next economic recession is just around the corner and others discounting an economic downturn, there are a number of steps every drilling oper- ation should take to be prepared in the face of this uncertainty - and to survive. Preparing for a recession means paying attention to the operation’s numbers now - like saving on costs or getting out of debt - to ensure the operation is in good shape later on. Cash flow is the lifeblood of every drilling-related business. To keep the operation healthy, cash needs to continue flowing through. While cash flowing out of the business is unavoidable, good times or bad, the harder times get, the more difficult it can be to keep the cash flowing in. There are cheap and easy steps to prepare for a recession or economic downturn. While big changes, such as delaying capital spending, should not be implemented until it is clear a downturn is occurring, other changes make sense even if a reces- sion never materializes. it can mean shoring up the drilling operation and its cash reserves while the economy is still boom- ing. During a recession, every drilling operation and business is constantly under financial attack from all sides: dwindling sales, increasing expenses, as well as customer and employee retention problems. Advance preparation is vital. This does not mean hunkering down too soon, but rather employing sensible survival strategies. A recession may or may not become a reality in the months ahead. Preparing in the face of this uncertainty can help every drilling business owner, operator, and manager gain market share and grow. That’s why it’s important to review the various scenarios now, including how the operation would handle a sharp drop in sales. While the last recession proved there are some circumstances which simply can’t be foreseen, a few steps might lessen the impact. To survive a recession: . Develop future sales goals. . Cut expenses, and track cash carefully. . Add value, not price. . improve communications with customers. . Underpromise and overdeliver. . Keep marketing. Don’t be tempted to cut or eliminate marketing activities. Unfortunately, there is nothing that will make any drilling operation 100% recession-proof. However, making the right moves now, can help ensure the operation survives tough times and, perhaps, even be able to profit from them. Mark Mark E. Battersby may be contacted via e-mail to 20 MARCH 2020 WorldWide Drilling Resource ®