Eight ways a business can survive and prosper in a downturn

What doesn’t destroy us makes us stronger

There’s no question that the economic downturn (what we seem to call recessions these days) is putting a pinch on everyone, consumers and businesses alike. With the spiralling cost of fuel getting around is difficult but it also increases virtually everything we buy. Businesses are pressed between the hardships of their employees and the restricted budgets of their customers. With some clear and creative thinking, business can still find solid ways to weather the pressures, save money and maybe even make a little extra.

Eight ideas to get you started in turning around a downturn

No matter your industry, whether you run an HR Outsourcing firm, a marketing company, an information services venture, or a manufacturing concern, you can find ways to survive and thrive in an economic downturn or recession. Here are eight ways you can survive the current economy and maintain a healthy cash flow, if not actually grow your business:

1. Change your paradigm. What is a paradigm? Your paradigm is the window through which you view the world. It is tinted by your personal experiences and the customary way you do things. Written on the window are the experiences and prejudices you’ve developed in running your business and your life--all of which affect how you see things.

Before you can see the opportunities before you, you must do what you can to view the problem from different perspectives. Ask yourself what you can do if you can’t do what you are used to. With practice at looking at problems from other perspectives, you can become your own best consultant. Creative problem solving is what will separate those who thrive during a downturn and those who end up throwing in the towel.

2. Take a personal interest in your company’s financial picture. Look to your personal expenses as they draw from your company’s profits. If you are a business owner, the two are inextricably connected. List out on a spreadsheet or just a piece of paper all the things you owe and what you own.

3. Look closely at where you are spending your money and cut back. There is some cutting back to do and it may not be apparent at first look to what items are needs and what items are wants.

4. See what you owe, and check the interest rates for each. Pay off money you owe that is costing you the most. You can do this by focusing on the higher interest rates or by consolidating debts under the lowest possible rate.

5. Cut personal expenses to reduce the draw on your company. If you own your own company and pay yourself a salary or draw, the monthly expense nut you need to crack personally may actually be smaller than what you are living. Check your thermostat, your cable or internet service at home, your cell phone contract(s), your insurance deductibles and other monthly obligations. Saving a few dollars on each of these items can add up to significant monthly reductions.

6. Cut future long-term expenses while investing in growth. Does your company own or lease its property? Would you like to own it? Maybe there is a way to do that now. There hasn’t been a time in almost 80 years—not since the Great Depression of the early ‘30s—where there has been such a clear buyer’s market for property.

7. Seek business you have previously refused or have never sought before. Networking with your current customers can help you find new business. If you are good at keeping your customers happy with your quality services, they may know others who could benefit from your excellence. Ask them. You are likely to uncover candidates for new business ventures you didn’t even know about.

8. Keep positive. Downturns are just that--a temporary economic turn, downward. Along with smart investing for the future, prepare yourself for the upturns and then future downturns won’t be so tough. There is no time like the present to build hedges against inflationary spirals (and they are bound to follow serious downturns) and future cycles.

Be creative and realize that challenges also provide opportunities for growth. As difficult as it is for people and business to deal with serious economic challenges, taking a close, healthy look at the way you conduct business and live your personal life will produce chances for you to improve your personal and business situation overall. Remember what they say about life giving you lemons? Make lemonade!

Watch out for part 2 of this series, "Making money in a recesion" (August newsletter).

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CBR is named the first PEO in Arizona to be honored as a BBB Ethics Award Finalist for 2006 and 2007. This award applauds employers as they strive to ensure that ethics remains a driving force in their business.