Let’s begin by being realistic about two things…first, this economic recession isn’t going to go away anytime soon.  I just came across a statistic this morning which stated that 40% of all American homeowners are underwater with their mortgages, meaning that they owe more on their home, than it is currently worth.

The effect of this issue is that for many homeowners, the financial safety net and the ability to finance significant purchases is gone.  Couple that with the sobering reality that for many people, retaining their job is a day by day scenario.  Discretionary purchases of things like new appliances, a new car, etc. have simply evaporated.  Recovery is currently being forecasted for 2010, but it may be much longer.

The second reality that I need to point out however, is that as long as there are two people inhabiting this planet, there will be commerce.  There will always be a need for urgent healthcare requiring supplies and services.  There will always be a need for food and products produced by the agricultural industry including products and services such as packaging and logistics services.

So what’s my point?  The economic downturn is going to impact each one of us business owners.  Don’t hide behind the “doom and gloom” attention the media is giving our economy. The ‘business of commerce’ isn’t going to disappear; it’ll still be there for the survivors.  Even during a difficult economic downturn such as this, there are so many opportunities available to catapult your business to the next level.  Make sure you are open to those possibilities to cross your path.

So here’s a few specific tips and strategies for those of us who want to do more than merely survive the economic setback.

1.    Get to the bottom – right away

If your business has been, or continues to be impacted by the economy, plan ahead and get to the bottom of your worst case scenario right away.  Nobody likes to lay employees off, but they can read the writing on the wall just as well (if not better than) you can.  When you fail to act, their sense of safety, of working for a management team that is in control, becomes threatened.

But even more important, is getting to the bottom once, then bouncing back.  Continually laying off more employees month after month destroys morale.  ‘In which month will my number come up?’ Employees operating in this environment are far more preoccupied with their safety net than with yours.

2.    Long Range Planning

Put a bit less emphasis on your long range planning.  For many of us business owners and entrepreneurs, the severity of this economic downturn is uncharted territory.  Who can safely predict when a recovery will take place?

In February 2009, General Motors sold 127,296 new vehicles, a 53% drop in sales.  Did it occur to anyone that if the automotive industry continues stringing these 40% and 50% sales declines month after month, that in February 2010, General Motors will sell a total of 62 new vehicles (assuming they’re still in business).  Will that actually happen?  Probably not. But no one predicted this lengthy string of monthly 50% sales declines eight months ago either.

Short term planning is much more important than long range strategy with this economic environment.

3.    Take advantage of opportunities.
As you downsize and streamline your business, be very aware of the opportunities that are created in your industry by competitors who are in worse shape than you are.  Take the right opportunity to go after market share, to improve your sales force by recruiting your competitor’s best people.  For shrewd business owners, more money is made on the ‘back side’ of an economic recession than at any time.  Know when the time is right, and position yourself for the eventual recovery.

4.    Risk management

It is important to identify the key risks your business may face and develop the strategies to eliminate or reduce them. This will make your business more flexible and more able to withstand volatile and unpredictable market conditions.

Some of the more common risks include:
•    losing customers and failing to attract new ones
•    increased competition
•    poor cashflow
•    failure to anticipate problems/inability to adapt to changing market environment

5.    Customers and competitors

You must have a clear strategy for identifying and looking after key customers and growing relationships with them. It also pays to plan for certain worst-case scenarios which might arise, such as losing a major customer that owes you money. Try to expand your customer base as soon as possible – then the loss of a major customer will have less effect.

6.    Keep that cashflow healthy

Cashflow is the balance of money entering and leaving a business. It is important to anticipate cashflow problems as early as possible, so that solutions can be found before the problem is urgent.

At all times you need to know how much money your business has in the bank, how much it owes and how much it is owed. If you regularly update your financial records and develop forecasts showing likely sales, profit and loss, you should be able to identify when additional funds might be required.

With a tough economy, some companies may be tempted to sit back and wait for business to turn around. Smart B2B marketers know that prudent management of their marketing dollars is essential, but doing nothing will result in short and long term problems. After past economic downturns, media measurements consistently show that those marketers who continue to focus their marketing efforts will be the first in line for rapid growth during the recovery.

7. Increase the volume in your sales pipeline.

A sizable number of medium sized companies – 60%, have reported increasing sales cycles according to Scott Gillum, Sr. VP Financial Services at MarketBridge. In other words, it’s taking longer to close a sale.   If you can increase the volume of sales activity going into your sales pipeline, do it!

8. Other action steps you can take during this economic downturn include:

♦ Keep your sales force focused on building relationships with new prospects.
♦ Analyze your direct competitors to identify your sales and  marketing strengths and weaknesses.  The analysis system at www.MentoringSuccessGroup.com is an ideal way of measuring these opportunities.
♦ Look for ways to partner with other companies.
♦ Continually analyze your industry to determine what new marketing trends are developing.
♦ Examine your own brand to make sure your value proposition is stronger to your customers and prospects.
♦ Review your pricing strategy; see where you can you can make various offers at different price points.