subject: Economic Recession- Surviving The Economic Downturn [print this page] Economic Recession defined as a period of an economy where there has been a negative growth in the Gross Domestic Product for more than two quarters. Without question, recent global events have caused all of us to reexamine the world we live in from several different aspects. Lets face it we now live in a different world. Not only do we live in a different world, we also now operate our businesses in a different world. Times are tough and, no matter what business youre in, companies are struggling to keep the doors open through the Economic Recession.
Companies have to rethink and figure out new strategies to provide service to customers and how to efficiently manufacture products that their customers need. Much of this requires planning, knowing your costs, adjusting successfully to customer changes and knowing when to take business at cheaper prices. The more professional your companys products and services are, the better position you are in to survive any slowdown.
Therefore during these tough times and at this stage it is important to take steps to reduce the outflow of money. Here the success factor depends on how to create more margins from low investments and spending. You should always be looking for savings and efficiencies - not just when times are tough but even when you're growing.
Outsourcing non core activities such as accounting and bookkeeping may not be a bad option. Since their business has always been to save on costs for clients. These companies specifically providing services such as accounting outsourcing and bookkeeping outsourcing not only saves you money, but is the best way to survive the economic downturn and ensure your business is well positioned to capture growth once the economy recovers.
When it comes to budget changes companies typically tend to pull their advertising and marketing budget. Truth is by doing this and reducing communication you are only affecting short term sales, which in return negatively affects profit. In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies covering 16 different SIC industries from 1980 through 1985. The results showed that business-to-business firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn't keep up their advertising.
Smart companies facing economic slowdown must develop and implement aggressive growth strategies in their core business areas if they are to build solid foundations that will propel them ahead of competitors over the coming next two years.
A thoughtful, managed risk strategy is essential to survive and enjoy the rewards after the recession. If youre running your business scared and making all your decisions by fear I think youre doing it wrong, regardless of the economic situation. I know I didnt start a business just to survive and get by. This will pass. It might take awhile, but it will and I want to be right with my business and myself when it does. Id rather go down fighting for whats right than bend a bunch of rules just to get by.
