Tuesday, January 6, 2009

What It Takes To Survive a Recession

The National Bureau of Economic Research, the country's business cycle arbiter, officially declared last month that the United States has been in a recession since December 2007.

Before you get caught up in the doom and gloom, though, remember that a recession doesn't mean your business has to decrease. It does have to change, though. Here are some ideas for surviving, and even thriving in the current economy:

1. Do not cut back on critical expenses that maintain your product's quality; do cut back on any manufacturing or production expenses that do not directly relate to the quality of the end product.

2. Do not panic and stop all marketing activities; do cut back on those that have no proven rate of return. There are hundreds of low- and no-cost marketing activities that can replace almost all of your current marketing expenses.

3. Do increase employee incentive and work-for-performance (i.e. commission) programs. You may not be able to give raises this year; instead, provide cash incentives to reward the behavior that you need right now, such as new business prospects, rate of production, etc.

4. Do reward loyal customers, and thank those that refer more business to you by giving them discounts or even just a "Thank You" card.

5. Do focus on the products that are most profitable - constantly improve on them and dedicate more marketing investment to them. Do not try to save a product that has not been working for you or launch a new product unless you have conducted extensive market research to ensure that it will make money. Now is not a time for random risk-taking.

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