By Cassandra Chew

TO THE Lim family, there is no right or wrong time to do business, only different economic climates that call for different business strategies.

This is why the owners of teak furniture firm Scanteak invested $600,000 in research and development last July, just as the storm clouds were gathering ahead of the global financial crisis.

It wanted to develop a new range of space-saving products to appeal to customers with tighter budgets, such as a $959 loft bed with a collapsible table. It also set aside about $280,000 to beef up customer service.

These efforts, on top of cost-cutting measures, have proved a winning formula as turnover last year jumped about 45 per cent to $55 million from a year earlier.

Since the global financial crisis erupted last September, the firm has posted revenue increases each month of 15 per cent from a year earlier.

Buoyed by this record and unbowed by the deepening economic gloom, the firm is marching ahead with expansion plans.

Scanteak now has six outlets here, and 84 outlets in two other markets, Japan and Taiwan, where it is the No. 1 furniture chain store.

It employs 30 staff here and 270 overseas and has no plans to retrench. In fact, it hopes to boost its overall showroom count to 100 outlets and staff strength to 330 by the end of the year.

Founder and managing director Lim Pok Chin, 55, runs the show together with his wife Catherine, in her mid-50s, who started out as his first employee in 1974 and is now the executive director. Their daughter Jamie, 29, who has a business marketing and communications double degree from Biola University in the United States, joined in 2005 and is now Scanteak's regional marketing director.

Their son Julian, 26, currently pursuing a Master's in Business Administration at the University of Michigan in the US, also weighs in on business decisions.

With a recession at hand, it is all hands on deck for the Lim family. Business matters are often discussed over the dinner table at their four-bedroom Upper Bukit Timah condominium.

In 1974, Mr Lim started Scanteak's predecessor Hawaii Interior Decoration in a 400 sq ft office space in Joo Chiat with just one employee. The private school business diploma holder ran into his first recession at 23, during the 1976 economic crisis caused by rocketing oil prices.

With no clues to financial management, he quickly lost $40,000, and had to borrow to tide his company over the recession. But just as quickly, he updated his designs and attracted new customers by offering modern designs from European catalogues.

Since then, cash flow and reserves have become top priority at Scanteak. MrLim practises 'careful spending' during the good times to shore up reserves for the bad. 'Every country goes through good times and bad times. What brings them through is the strength of their reserves, their leadership and their morale. The same applies to businesses,' he says.

The firm counts about 10 per cent of turnover as profit. Of the 10 per cent, about three-quarters is put towards its reserves. Only a quarter is invested in riskier ventures such as exploring new markets.

Operations at Scanteak are lean. The 3,200 sq m head office in Sungei Kadut is spartan. Furniture parts are made in cost-effective factories in Indonesia and Malaysia. Showrooms have two staff at most at any given time. Air-conditioning at the showroom in its headquarters is switched on only when visitors arrive.

Mr Lim's philosophy: 'If you exercise often, you won't be out of breath when you climb a mountain. Without consistently putting money aside into the reserves, it will surely be very tough. But with reserves, it's a piece of cake.'

With so many factories shutting down, Scanteak now often has the upper hand in negotiating deals when buying furniture parts, like table tops and sofa bodies. The savings are then passed on to customers.

New products launched this year include modular designs, which allow customers to buy, mix and match individual pieces of furniture according to their needs. It has also come up with three new dining chair designs priced at between $179 and $239 for customers who prefer to add seats to the dining table rather than replace an entire dining room set, and benches at $399 that can fit in more people at a table.

Ms Jamie Lim said: 'To save costs, instead of changing entire pieces of furniture, customers now prefer to update their cushion covers, or add side tables to give a new look without spending too much.'

Scanteak's resilient and aggressive approach to the recession is characterised by Mr Lim, who is determined to achieve a turnover this year that tops or at least matches last year's $55 million.

He said: 'A business person can spot opportunities everywhere. So no matter how the numbers add up, there's no need to be pessimistic. It's not the plague.'

This article was first published in The Straits Times.