Happy holidays and a Toast to a successful 2009!
It’s a cliché, but one that still works is “Tough times don’t last, but tough people do”. We’re in the midst of some of the most “challenging” economic times that most of us have ever seen- and hopefully will ever see- , and with the new Administration and world uncertainty, it’s anyone’s guess as to when it will settle down. Stability and consistency may be the exception to the rule for the future and this world of today may be the new “reality”. So what does that mean to business owners or those looking to start?
Recessionary times are not the exception to the rule, but are a recurrent theme in the world of business. It challenges you to stand back and objectively look at what you do (or don’t do) and determine the things you can improve. And there is always room for improvement. One of these advantages of times like this is that your competition is feeling the pain, too, and many of them will not last. So it’s up to you to make sure that the Survival of the Fittest means that you come out of this cycle, lean, mean, and profitable.
We’ve identified 5 key steps in helping you to survive for this New Year. They will be explored in more detail over the months to come, but we will highlight the major categories:
1. Warning sign: take a snapshot of your current situation. This means looking at your cash flow and business plan to make sure they still “work”. Ask yourself honest and objective questions and reply with honest and objective replies.
2. Reduce your overhead and stop the bleeding. The times for frivolity and wasted expenses are gone.
3. Increase your sales and income. This is a non-stop priority, but in today’s world it is even more vital.
4. Reevaluate your business model. Are you a victim of the times, maybe offering products or services that are less in demand? A course adjustment may be a simple or major tweak.
5. The Next Steps: are you able to live with and embrace the new rules? We don’t know what they are yet, but you will be part of them development.
It seems counter-intuitive, but in many cases starting a business in a recession is an advantage and many businesses do thrive. Here are some interesting stats:
- Of the 30 companies in the Dow 30, 16 were started during a recession.
- Both Disney and Hewlett-Packard began in a down cycle, 1923, and 1938.
- And good old Microsoft began in the 1975 recession.
In Southern California during the last recession in the early 90’s, we had massive lay-offs of engineers and highly educated and highly paid executives. The results of these firings were the foundations of smaller, leaner companies that picked up the hiring dilemma and had the cream of the crop to draw from. Not much different than today. What all of this means is that your odds of success increase dramatically if you start a business now because your overhead will be much less than if you were to it in boom times. And since keeping your overhead low is a basic component of small business success, and bodes well for today's entrepreneur.
It’s all about growth and education. Are you in need of a top notch executive to take your company to the next level? Throw a stone, you may hit one!