Sailing through the wreckage: ACG sponsors Holme Roberts & Owen LLP, Grant Thornton offer advice for thriving during a downturn.

• Author: Lewis, David
• Position: Association for Corporate Growth

If turning the giant U.S. economy around is akin to maneuvering an ocean liner, then turning today's economy around might be more like moving a ship trapped in ice. Credit markets, capital formation, credit instruments, hiring, liquidity, mergers and acquisitions--all seem frozen solid.

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So steering a business in the wake of the macroeconomic wreckage seems challenging indeed.

Helping companies to move forward, even through ice, seems to be a typical quality of many of the sponsors of ACG Denver's 7th Annual Rocky Mountain Corporate Growth Conference. We asked a couple of them for some reasons for ACG members to hold their heads up, as the song says, through this storm.

David B. Strong, ACG-Denver president, is a partner with law firm Holme Roberts & Owen LLP's Denver office and a member of its federal income, state and local tax group, advising corporate and individual clients on the tax aspects of transactions including mergers and acquisitions. Hendrik Jordaan, also a partner with the firm's Denver office, is co-chair of HRO's corporate group.

They agreed that sponsor-backed merger and acquisition activity as well as venture capital investments were effectively on hold, or were appearing only sporadically or at micro-levels, but that certain strategic acquirers with healthy balance sheets remain active.

With markets making it difficult to assess the value of corporate assets, caution rules the day, and Strong and Jordaan advise businesses to adopt a renewed focus on fundamentals and selectively pursue only the most promising new opportunities for growth.

In order to do that, another lesson from prior economic downturns is worth reviving: Today's climate represents an opportunity to get your business' house in order.

Yet what do most companies look for during a serious recession? One answer is, cutting costs. A second, related answer is "liquidity."

But this order of priorities might induce all the wrong reactions in a downturn.

Accounting firm Grant Thornton recently released Jim Burton and Christ Wilt's "The Credit Crunch, a Practical Guide," which explains priority action items for businesses to consider as they manage through the credit crunch.

"Growth masks a lot of underlying operating issues, and it's in times like these, when growth slows, that those issues surface," says Burton...