Did the current economic conditions catch you flat-footed? Whatever you call the prevailing business conditions-- a recession, a contraction or a downturn, your business is probably feeling the effects.
In “Predicting Cycles in Economic Activity,” (April 2008), Jane Haltmaier, Adviser on the Board of Governors of the Federal Reserve System, states “Predicting cycles in economic activities is one of the most challenging but important aspects of economic forecasting.” In my experience, cycles -- (boom/recession, expansion/contraction, and upturn/downturn) are guaranteed. The challenge is accurately predicting the timing and the magnitude of economic cycles. The opportunity is what you do about the economic cycles.
Haltmaier goes on to explain that predicting economic cycles is “…of key importance for policymaking.” How do you respond to economic or business cycles in your business?
Here’s the good news and the bad news—“This too shall pass.” All cycles end.
Guidelines for making the most of this economic cycle:
• Continue to market your products and services. Be strategic in where you spend your money, energy, and time. Remember the value you bring to your prospects and customers so you market from a mindset of confidence. Consider this self study course developed by Marcia Yudkin, marketing guru, to stay on your customers' radar screen and to attract new customers.
• Stay connected to your customers. Discover how their business is affected in this economic cycle. Determine what new products or service you can provide that meets their new needs.
• Keep an eagle eye on your cash flow. Find creative ways to increase your inflow of cash and minimize your outflow. If you have space you don’t need, rent or lease it to someone. Keep enough inventory on hand to serve your customers well but don’t tie up your cash in excess inventory.
• Create ways to improve your efficiencies and lower costs. Involve your employees in finding solutions. Where can they find ways to cut costs by 10% and increase production by 10%, for example?
• Be transparent with your employees about how the company is doing. Communicate clearly and often about the state of your business. Your team is vital in navigating unchartered waters and stormy seas.
• Keep training in your spending plan. Help employees learn new skills and retool for new challenges and opportunities. Look for ways to educate and train your customers to help them in this business cycle. Helping your customers stay efficient and profitable not only helps them it helps you. Contact me if you'd like
some ideas on how we could make this happen.
During this economic cycle consider these questions as you prepare for the upturn which comes as surely as “day follows the night.”
1. What did you learn? Pay careful attention so you don’t have to repeat the lessons. Why go to graduate school when you can get it in kindergarten?
2. How did you, your employees and your customers benefit? While you all may have experienced some challenging times, you met the difficulties together.
If you resist making the required changes or wait too long to shift gears to meet the demands of these economic challenges, you may not be around for the upturn. I learned to snow ski in the mountains of western North Carolina on “blue ice” with throngs of novice skiers, many of them out of control. I have concluded that if you can ski there, you can ski anywhere. Skiing in Aspen, Snowmass, or Park City is more fun, easier and safer.
Are you prepared for tomorrow’s prosperity? Taking the appropriate steps today in this current business cycle, you are situated to make the most of your existing opportunities. Now is the time to be innovative, bold, creative, tenacious, and smart. Are laying the groundwork for your success or will the next business
cycle of expansion catch you flat-footed, too?