How Diversification Can Save You From Crisis

When the Berlin Wall fell, recruitment agent Tony Goodwin, 49, sensed a business opportunity. “I thought that whole swathes of Europe would soon be opening up to capitalism and would create a massive jobs market.” He spent the next two years “reading everything I could get my hands on”. By 1991, he “knew as much as anyone living in London about the situation in eastern Europe”. He also scoured newspapers for news of Western firms that were moving into eastern Europe. “When I spoke to the right people at these companies, I realised I was on to something.” Over the next year, Goodwin worked for two other recruiters before setting up his eastern-European-focused recruitment agency Antal in 1993.

The first thing he needed was a client. Goodwin contacted the British Chambers of Commerce in each former Soviet Republic and compiled a database of all the UK firms in the region. This approach landed him a deal with Saatchi & Saatchi’s Budapest office. The advertising agency was looking for a finance director, so Goodwin promptly set up a Budapest office and fulfilled the contract. More business followed as Western firms poured into the newly opened markets. “We were also helped by government schemes set up to transfer Western skills and know-how to eastern Europe.” Within six months Goodwin had opened offices in Hungary, Poland and Russia. Rather than staff them with eastern European expats in London, Goodwin’s recruited Westerners who had studied eastern European languages. As Russia’s economy developed, Antal’s sales soared as local firms started to use them.

By 1998 group sales were £5m and Goodwin had reinvested the money in new branches in Germany, Spain, Italy and the Netherlands. But that year Antal was rocked by Russia’s financial crisis. Businesses stopped hiring as the economy fell. Goodwin cut back the Russian office from 78 staff to 11 and focused on growth in other countries.

It worked. By 2000 he had 423 staff and offices in 22 countries. Then the dotcom bubble burst. Half of Antal’s offices were closed and more than 250 jobs cut. But diversification saved the business again -this time growth in Russia pulled the firm through. By 2007 the Russian office was doing so well Goodwin decided to sell it for $30m. Goodwin used some of the proceeds to fund an initiative with charity Chance UK. Today, the firm operates in 33 countries, has 100 offices and sales of over $50m. Goodwin reckons it is now time to sell up again – he plans to spin-off the Polish and Chinese businesses.

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