Can Your Business Survive a Recession? Work Smarter, Harder and Leaner

Back in June when I wrote that I thought many industries were already in recession and the US economy as a whole was on its way to a recession many were in disagreement. With the stock markets taking a hit and banks going into receivership I think we are already way beyond recession and now heading for a larger economic downturn then most would say. I don't even want to use the word depression but when you look at the historic reasons for the depression you can't help but see parallels. Banks going under, stock market values falling, people loosing their homes and jobs.

The big difference is the governments willingness to inject cash into the market sooner rather than later which will hopefully keep things from getting worse. The economy was being supported by borrowed money for so long it shouldn't be a surprise that it ran out.

As a business owner what can you do to survive this economic downturn?

Simple answer be smart about credit and spending. Longer answer:

1. Don't plan to expand in the next year, if your business plan called for expansion right now, revamp it and create a maintenance plan for the next 2 years at least.

2. Don't borrow right now. Get your inventory levels under control with systems that enable you to have more just in time deliveries and less overhead. Figure out a system that will enable you to turn over inventory more efficiently and cost effective. If possible negotiate longer payment terms then you currently have with suppliers.

3. Bring in more "must have" items, by this I mean necessity consumable items that people have to buy that are similar to what you offer consumers now. Keep luxury items at a minimum.

4. Advertise, but don't be stupid about it. You still need to get your story out into the market place and let people know that you are still in business. If you stop advertising your present customers may think you are no longer in business or worse, that you are going out of business. Advertising is an investment not a cost. Make sure you advertise where your customers see you and in the most affordable manner.

If you have a full colour ad in Yellow Pages you may want to cut back to a black and white ad that is the same size or look to their competition for more affordable advertising: Canpages being their number one national competitor.

Look at going to community newsletters for affordable advertising rather than the big ads in the newspaper. Community newsletters are relevant to their readers, are delivered to consumers homes, and is much more affordable then newspapers.

Instead of independent direct mail fliers that get thrown into the round file, advertise with direct mail catalogs like UPTOWN which provide recipients with articles and relevant information. These magazine's will stay in a home longer than your independent flier and cost you a lot less.

Know where your customers hear about you and find your contact information and then focus on those areas of advertising first.

5. Network, Network, Network....... Attend as many networking functions as you can without breaking the bank because this is affordable word of mouth advertising at its best. Don't go in expecting to make a sale right then or to sell everyone on your business. Go with the expectation of meeting new people and finding new services and business that you want to use.

Have a good 30 second commercial that will spark interest in your business and how you can help their business or personal lives. Don't go in spouting how great your product is and then leave and never return, networking takes an investment of time and interpersonal skills.

6. Merge your resources with another business. Cooperative marketing or cooperative advertising will help both businesses cut costs but at the same time provide both with exposure to the marketplace. Partner with a business that is a complement to yours and not your competitor. Put a plan in place together and write out the responsibilities and expenses of both parties. This will act as a contract for both of you to understand expectations and responsibilities.

7. Hire Professional Advisers. Professional advisers can help you look at the problems you face in a different creative way to ensure that you will come out ahead in the long run. Ask people who they use, google them, read their blogs or articles, and contact them to make an appointment to discuss your business.

Surviving a market downturn, especially one as ugly as this one could be will take planning and commitment on your part. If you continue to run your business in a reactive way instead of proactive you may find yourself in a huge hole that you can't get out of. If you want to be a successful business person, you have to foresee any circumstance and have a plan of action for the long run. By planning, working hard, being smart, and understanding your customer base you will come out of any recession ahead of the game.

Other entries on this topic:

Is the US going into a Recession?

Should you Cut Back on Advertising During a Recession?

Advertising Can People Find Your Business?

Consumers are Spending Less