Private Equity/Venture Services

While we are all biting our nails as we wait for yet another shoe to drop in the economic situation, there are some actions we can take in our own businesses.  We all know that we are in an economic slowdown (now officially labeled a recession by the National Bureau of Economic Research) and that there will be a recovery period of some duration.  So let's look at some things we can do to help our businesses weather the storm and maybe even come out stronger on the other side.  While the bailout, or lack thereof, of banks, insurance companies and automakers may not be within our control, we do have significant control over our own companies.

In looking for inspiration for this article, I actually Googled the phrase "happy news articles."  I came up with some very interesting hits.  Here's the way I boil it down:  people are still compelled to help others; there is still a general concern about our environment; people are finding creative ways to make money in the downturn; and we all need to refocus our businesses.

One of the keys to surviving the downturn is finding your business's market niche.  You need a way to differentiate your business from those of your competitors and keep your competitors out of your space – a sort of business Great Wall of China, if you will.  It seems to me that this wall needs to be both strong enough to survive attacks over the long term and sufficiently flexible to deal with change.  (For example, the changes in our economy between September 2008 and December 2008.)  There are a number of ways to differentiate your business – on the basis of target customer, region, branding, innovation or others.  Pick one and run with it, but evaluate periodically (especially now) to make sure it still fits your circumstances.

Now is also the time to bust out the business cards and kick your networking into high gear.  Everyone is experiencing difficulties right now.  The more people you talk to, the more ideas you can gather as to how to deal with those difficulties.  In addition, because everyone will be to some degree shifting their business focus to accommodate the economic situation, networking can help you to better align your business to serve other businesses as well as consumers.  Also, when we finally do emerge from economic oblivion, you will have built yourself some strong relationships that can continue to benefit your company.

In addition to focusing on our external markets, we need to evaluate the internal workings of our companies.  First, dust off the strategic plan and re-examine it.  Does it still make sense given current and expected market conditions?  If you don't have a strategic plan, now is definitely the time to adopt one.  A business without a solidly defined direction is unlikely to succeed in this economic environment.

In addition to the big picture strategic plan, you should have operating plans that show how you will fulfill the goals of the strategic plan.  Look at your sources of revenue and your expenses.  Refocus on the customers who are likely to continue to purchase your products or services, or the types of products or services that are likely to continue to sell, under these economic conditions.  Review your marketing materials to ensure that those customers or products are the focus of your materials.  Consolidate or eliminate suppliers and service providers if at all possible.  Consider whether your staffing levels are appropriate and properly allocated.  Think about increasing employee training.  There are free, or low cost, online training programs that will give your staff enhanced skills that can benefit the company in the long-term without adding significant cost in the short-term.

So, let's focus on what is in our control.  Recognize the realities of the economic situation and adapt your business as needed.  And keep your chin up – we're all going through rough times but there are actions we can take to improve our situations.  The worst reaction would be to sit back and passively wait to see what happens to your business.