2010 Strategies: Close to the Vest

Lorenc + Yoo, a Roswell, GA-based, environmental-graphic-design (EGD) firm, has developed architectural-sign programs and exhibit tradeshow graphics, among other disciplines, for international clients for 31 years. Jan Lorenc, the firm’s co-principal, describes the firm’s design philosophy as “one of exploration, inquisitiveness and commitment to … excellence and innovation.”

While traveling throughout Europe in early autumn 2008, he first began hearing widespread rumblings about the impending financial crisis. He traveled from there to Dubai (United Arab Emirates) immediately thereafter to verify project progress, and the economic waters appeared calm. However, shortly after his return, his Middle Eastern projects began shutting down en masse.

“Our work is done, but none of the projects have been built,” Lorenc said. “Even the EGD for the Dubai World Championship of Golf [which took place November 19-22], which had to be finished, was only partially done [as of early November].”
He continued, “I’ve been receiving emails from clients who’ve been my bread and butter for years letting me know they’ve been let go. Our mall and retail business has become basically dormant, but our corporate work has increased. Institutional work has probably remained the steadiest, but healthcare, which had remained vital, now seems to be waning a bit.”

During every economic climate, Lorenc emphasized the importance of maintaining a financially conservative approach. He said the firm currently owes no debt (including no mortgage on its current studio, where the firm has resided for 10 years), and doesn’t make any purchases for which it can’t afford to promptly pay. Lorenc noted the firm had to recently lay off one employee, but, because it maintains a lean staff, doesn’t anticipate any further reductions.

Also, he said it’s important to not panic during challenging times: “Some of our competitors are taking jobs for 50 cents on the dollar of what they charged in better times. When you precipitously cut your incoming cashflow, you’re going to have to pay up eventually to cover staff and production expenses. Two of our former, Atlanta-based competitors have folded, and I consider our firm the leading EGD provider in the Southeast at this time.”

Going forward, he envisions doing significantly more work internationally because many longstanding U.S. clients have sharply reduced or eliminated new projects due to lack of funding. According to Lorenc, the firm has worked abroad for 15 years. It initially tapped into the Asian market – especially Korea, Malaysia and China – and, in the past five years, has made significant inroads into Dubai and other Middle Eastern locales.
During the slowdown, Lorenc has redoubled his efforts to maintain contact with past and present clients. He said, “Building and maintaining relationships is the lifeblood of any business. It’s that level of respect and trust that will keep clients loyal to you with repeat business that will help you survive tough times.”

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Although Lorenc has sustained his business through “pockets of activity” — he said upscale resort properties have remained fertile ground despite the recession – he doesn’t foresee a widespread economic recovery until the latter part of 2011 or 2012. Lorenc said, “When recovery finally does happen, I think clients across all markets will want to update their properties, and our work will pick up at a breakneck pace. Even when good times resume, it will be important for us to maintain a broad client mix and fiscally sound principles.”