How To Survive An Ebbing Economy
 By B.J. Addington

Call it an economic downturn, a stall or a recession. No matter what you name it, it’s clear that the U.S. economy is getting choppy.

Credit is tightening. Gas prices are rising. And consumers are becoming more cautious with their spending.

HSBC Bank USA, the U.S. banking unit of one of the world’s largest financial services companies, recently announced the results of an HSBC Direct Consumer Survey. The survey revealed that the fear of recession has caused Americans to reduce spending.

“Tough economic times are changing the way Americans manage their finances,” says Michael Prebenda, senior vice president and global head of HSBC Direct. “The data uncovered a commitment to cutting back, with nearly two out of three consumers intending to reduce indulgent spending in 2008.”

But, your small business doesn’t necessarily have to sink, even if the economy ebbs. Here are five ways you can take advantage of an economic slow down and position your company for success when conditions improve.

1. Connect With Past Clients
Don’t go begging for business or asking for work. Simply call past clients to reconnect.

Call and ask if you can use a past customer as a reference for new clients. Or check a past customer’s Web site to see what’s new with his business. Has he landed a big new client? Moved to a new location? Received an award? Call and congratulate him.

Both of these examples are great openings and opportunities for you to show up on a client’s radar and bring a past customer back into the fold.

2. Play Catch-Up
When business was booming, it’s likely some of your plans and projects got put on the back burner.

Remember that home office security system you were going to install? Or the Web site you wanted to launch? Or the employee handbook you planned to develop?

Slow times are the perfect opportunities to move some of those projects to the top of your to-do list. Get them done now, while you have time.

3. Invest In Training
Sharpen the saw, as they say.

Use this time to learn new skills and polish existing ones. Go to a seminar or conference. Take a community college class. Try an online course. Do it now while business is slow so you’ll be ready to take on the competition when the boom times return.

While you’re at it, train your employees. Improve employees’ skills in their areas of expertise. Or cross train them in other areas of your company. Your business will benefit in two major ways.

One, training will result in more productive and engaged employees. And two, training now during a downturn shows employees that you don’t plan any layoffs. Instead, you plan to increase their value to your business – and that builds employee loyalty.

4. Get Lean
When times are flush, business spending sometimes gets out of control. Bells, whistles, gadgets and gizmos that are nice – but not necessary – often swell the expense column of a ledger.

Take time now to analyze those expenses. Decide which expenditures have added dollars to your bottom line and which have been a waste of resources. Trim the fat.

5. Expand Your Business
Credit might be tight, but money is cheap.

If your small business is fundamentally sound, and you’re not struggling financially, now could be an opportune time to borrow money for expansion. Low interest rates make buying new equipment or improving your facilities attractive.

And if you’re sitting on a pile of cash, why not put it to work? Chances are, your money’s not earning much interest in a bank account. Maybe a better investment would be in upgrading your building.

Now might also be a good time to apply for a business line of credit. You may not need to tap the credit for months to come. But if you do, the money will be ready and waiting.
 

(Posted April 2008)

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