As a Baby Boomer in good standing, I've seen recessions before -- lots of 'em. The first recession I remember was 1958 and
effect it produced on Republican Party. (I sure hope George W took American History at Yale, but I doubt he remembers much.)Anyway, as a Recession Veteran, I've been watching economic prognosticators, commentators and opinion-makers struggling with current economic reality. Everybody wants this thing over yesterday. Because this is what they want, lots of people are dishing out a lot of "it's going to end in about five minutes" predictions on belief that to say it is to have it.
Well, it's time for some economic reality. These "doldrums" are universal; they effect every single industrialized country on earth... and there's no way in world you can turn this worldwide phenomenon around in a couple of months. What's more NOBODY know when things will end and get better, so we can all break out into a rousing chorus of "Happy Days Are Here Again."
What I suggest is that you stop wondering when it's going to end and prepare to do best you can to make maximum profits now and emerge from these troubled waters in best shape possible. The truth is NO ONE knows when this will all be over and only one thing is certain: in time things WILL get better.
#1 Cut Every Expense
One key to weathering a recession is to take your outgoing expenses and put them under both a microscope and a knife. You need to look at each item you spend money on and ask yourself whether you need this, whether you need it at current levels, or whether you could not get along with less of it or arrange your activities to cut back on this expense. In other words, you need to get total control of all your outgoing expenses, including (importantly) personnel, which is for most businesses largest single expense. Remember your objective: to survive bad times with as little discomfort as possible, cutting expenses to greatest amount possible, while leaving infrastructure of your business intact so that you're ready when economic turnaround eventually comes.
The silver lining in economic cloud is that all businesses spend at least some money unwisely. During economic times, when everyone is fat and happy, there's no incentive to make changes. "What me worry?" is Alfred E. Newman approach to expenditures during boom times. Thus, an economic downturn may actually have a salutary effect, causing people who are determined to survive to develop their MONEY CONSCIOUSNESS by putting every single expense under microscope and asking, "Do we REALLY need this?"
#2 What's Selling The Best? What Needs To Be Done To Sell More Of It? Do not accept diminished revenues as an immutable inevitability!
All businesses have best-selling products/services. A recession means you sell fewer of them. Is that acceptable to you? It certainly isn't acceptable to me! Thus, you've got to look at your best-selling items and then do what's necessary to sell at least same amount of them, if not more. Ordinarily this means cutting prices; certainly you should review your price structure. But you shouldn't only review your price structure. For instance, you can add more of product for same price, add extra time (like an extra month to a one-year service), or otherwise improve perceived value customer is getting. People don't stop buying in a recession. But they do put their buying decisions under a microscope. However, by understanding that they continue to respond to value and to bargains, you can structure your offers accordingly to counter diminished sales.
