First, have hope. Over 93 percent of economists now believe the recession will be over by Christmas. But second, start to position yourself. Now is the time to buy materials at bargain prices and, if possible, lock in long-term financing at “distressed” rates. (Even Microsoft issued new bonds in early May to take advantage of unusually low interest rates.) 2009 is the classic example of a crisis that’s also an opportunity - but to expand wisely, understand that the world has changed.
Watch the government. Starting on June 15th, there’s new financing available under the 2009 Recovery Act. It offers up to $35,000 in short-term relief for businesses “facing immediate financial hardship to help ride out the current uncertain economic times and return to profitability”. It’s provided by the Small Business Association (which even offers a toll-free phone number at 1-866-947-8081.) Washington is playing a big role in attempting to stimulate the economy, and some of that aid is being targeted directly to small businesses.
But you should also consult with small business advocacy groups and your industry’s trade association for the latest information. New legislation is being passed, some of which may have a profound impact on your business. For example, the big changes proposed for U.S. health care could drastically affect payrolls. But one small business owner I know also complained that new government contracts may be shifting away from what’s traditionally been considered a “small business.”
Moving online makes sense. I know entire businesses which have closed storefronts and simply pointed their customers to a web site. With the right marketing, online audiences can be tapped and increased around the world. Many companies have also saved money by replacing phone operators with online support. And one entrepreneur even suggested virtual conferences instead of the expensive real-world gatherings (with their associated high travel costs!)
Shoppers are becoming more cost-conscious, and are expected to remain so for years to come. I’ve heard recent horror stories from a mortgage broker, but this is true for the consumer market as well as the real estate market. Future product lines should be positioned with “value” in mind, and marketing campaigns should consider new thrifty consumer. And since forecasting is now harder than ever, limited “test marketing” should be conducted whenever possible. Economists are predicting a slow recovery, with continuing unemployment, and the consumer market could still remain challenging for years to come.
Save costs wherever possible. Five years ago I worked at a company which offered employees the option of a cut in a pay in exchange for a four-day or 35-hour work week. And in February autoworkers at Toyota agreed to shorter work weeks in order to keep their plants open. Wages aren’t the only area for cost-savings, but they’re one of the biggest opportunities.