Michael Mufson of Mufson Howe Hunter: How To Grow Your Business In A Challenging Economy
An interview with Kage Spatz, CEO at Spacetwin
Consistency is key. Staying engaged in the market and providing value-add information fosters trust. During tough times, adhering to a consistent approach aligns with client expectations.
Inflation is taking its toll on us and there is talk of a potential recession, while the tech industry is currently shedding tens of thousands of jobs. Is it possible to grow a business in these conditions? What steps should an entrepreneur take to grow their business during unpredictable times?
As part of our Strategy Series, Kage Spatz talks with fellow successful business owners and growth experts to help you discover new ways to grow your business during challenging economic times. Today, we had the pleasure of interviewing Michael Mufson.
Michael Mufson is managing partner of Mufson Howe Hunter, Philadelphia’s largest investment banking firm. He has nearly 30 years of experience as an investment banker to middle market companies.
Mr. Mufson has extensive transactional experience having completed hundreds of merger & acquisition transactions, private placements, recapitalizations, IPO’s, follow-on financings, and advisory assignments.
During his career, Mr. Mufson has served as a director of numerous public and private companies and has acted as general partner in venture capital and private equity funds.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us about your ‘backstory’ and how you got started?
After two decades of leading investment banking for three prominent financial institutions, one becomes very good at his or her craft.
Eventually, I felt a calling to honor my entrepreneurial spirit, leading me to establish my own firm. My vision was to cultivate an investment banking firm where a commitment to the client was sacrosanct, coupled with a highly professional staff dedicated to our clients’ best interests.
Can you share with our readers a story from your own experience about how you were able to grow your business during a challenging economy?
After almost 40 years in the industry, you learn that the markets will ebb and flow, and over time your emotional response to such events triggers your frame of reference as to a response.
Economic challenges make demands on an investment banking organization to cut costs to withstand the period of uncertainty but also maintain stability for the firm’s professionals.
Over the years, maintaining a leaner team helps the overall resilience of the company. A lean team that is confident in their employment and future at the company allows us to sustain our workforce and foster firm-wide camaraderie and long-term goodwill.
In addition to internal stability, being a reliable resource for clients, irrespective of market conditions, builds trust and helps secure a steadier revenue stream.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
Entrepreneurship in an investment banking environment is a daily challenge, requiring a relentless drive coupled with a consistent optimistic mindset.
Maintaining a positive attitude, tackling problems head-on, and viewing challenges as opportunities for solutions, to the extent possible, are essential.
The responsibility of leadership, where decisions can impact employee’s families and livelihoods, requires an unwavering focus to work through problems, which many times are beyond our control. Taking all of this into consideration, my commitment to my team is unrelenting.
What would you say is the most critical role of a leader during challenging times?
During challenging times, leadership entails projecting confidence even when faced with uncertainty.
“Fake it till you make it” may be a light-hearted phrase, but it underscores the importance of demonstrating steadfast leadership, tackling issues analytically, and addressing challenges one day at a time to limit the overwhelming angst.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate, and engage their team?
I remind my team that challenging markets are transient. The market crash of 1987, my first, seemed like the end of the world for me when I was starting my career. The markets started to turn roughly nine months later — a blink of the eye in the span of a professional career.
Reflecting on past experiences provides reference points, offering comfort that the current situation is temporary and will turn. As a leader, leveraging wisdom gained over the years inspires confidence and perseverance.
How can a business leader make plans when the future is so unpredictable?
Rely on your personal experience– strategies that have proven successful in the past. Establish a cash burn strategy relative to available resources, recognizing that every predicament has an end date.
What can a company do to avoid losing clients or customers who say, “I just can’t afford it now”?
As an investment banker, relationships tend to be long-term. If a client is having financial difficulties, we’ll work with them and play the long game.
If it’s a company that we like and its team is worth the investment, we’re willing to be patient and work with them through their present difficulties for success in the future.
What lead generation strategies work best during a difficult economy?
We use all forms of marketing and lead generation, including running public relations campaigns (spearheaded by The Tropical Agency), maintaining a consistent flow of our monthly and quarterly industry newsletters, and speaking to industry groups.
Most importantly, we utilize our client references when connecting with new clients and maintain consistent communications with our existing client base. We work especially hard to ensure each client assignment is a future reference. In professional services, a reference from a prior client is paramount.
Particularly in a slow down market, the larger investment banks come down market, marketing to middle market clients and our new business outreach even more competitive. Having consistent outreach strategies in place before a downturn puts our middle-market firm in a better position for maintaining and growing our client base as much as possible.
Are there specific marketing approaches that work best when times are tough?
Consistency is key. Staying engaged in the market and providing value-add information fosters trust. During tough times, adhering to a consistent approach aligns with client expectations.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
- Making Draconian changes without consideration for the long-term damage.
- Reducing costs by terminating employees over and over based on the vicissitudes of the markets.
- Lessening the brand’s value by taking on activities that don’t have a long-term benefit. It’s complicated, but it’s important to not forsake long-term benefit for a quick short-term solution.
When the market is down, you do have to do what’s necessary to survive — but you shouldn’t come across as reckless. The key to avoiding recklessness is to maintain a balance between growth and restraint.
If you grow faster than the market or your funds allow, you’ll be forced to make drastic changes that will harm your internal and external cultures, making recovery even more difficult.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business should do to grow during a challenging economy?
1. Prioritize stability in a challenging environment.
2. Maintain market share in a shrinking market. It can be hard to grow on a percentage basis, but you want to maintain whatever market share you have.
3. Stay cool, show leadership, and do the best you can to protect your staff, knowing you may have tough decisions to make sooner than later.
4. Take care of yourself personally and aim to maintain a healthy work/life balance.
5. Leverage strong vendor relationships in challenging times. When cash flow becomes an issue (which it always does in a negative market cycle), your strong vendor relationships will be there to support you.
We are blessed to have some very prominent names in Business, VC, Sports, and Entertainment read this column. Is there a person in the world who you would love to have a private lunch with?
I would love to spend a meal with Barack Obama. Aside from his brilliance and sense of humor, he accomplished some remarkable feats during the Great Recession and saved the country’s automobile industry.
Thank you for sharing your insights with our audience today.
Kage Spatz pays to acquire New Clients & Cash-flow Assets for your business — you only pay after new money hits your account. Reverse-engineer winning campaigns in your market, 100% risk-free today.