To Survive a Bearish Economy

Small Business Survival - How to Survive the Recession

How to Survive the Global Credit Crunch and Buyer's Remorse

How can medium and small businesses survive the credit crunch? More, how can you minimize the impact of consumers' lack of confidence in the economy? (See some of our business survival cartoons.)

I think this is an important question and needs serious attention. However, in order to answer this question, we need to understand the impact of the credit crunch on the business climate in the USA as well as across the globe.

The impact of the deleveraging actions of the banks across the world is that consumers cut on their expenses. And in bad economic times like the current recession it means drastic cost cuts. As a result, businesses around the globe have to cut their prices - not an easy thing to do when you are finding yourself in a cut-throat industry - e.g. in retail.

I call it the price crunch. Economists call it deflation - i.e. the opposite of inflation. Bottom line: during deflation times customers are getting more - even at lower prices. It is a customer's paradise...

Now, Warren Buffett once said that it is only when the tide pulls back that you can see who has been swimming naked. I believe this is especially true for small businesses (not that our big corporate brothers and sisters are immune to this... just check on the BIG 3 automobile manufacturers and Woolworths in the UK as examples!).

Personally, I feel that far too many small businesses ignored common sense best practices - during the good times (i.e. the past bullish market). This was my opinion 3 years ago when I have finished my first edition of Survival Kit for Small and Medium Businesses - Profit from your Business Risks! Now, it is three years later and I am even more convinced that our e-book addresses the bottom line reason for small business failures - a general lack of or resentment towards risk reduction practices among medium and small business owners. (At Business-Around-the-Globe.com we teach small business owners exactly how to minimize business risks.)

Note: In short, risk management is a very impressive word for identifying areas of profit loss in your business and putting and end to it. (I call it "profit protection" because that is exactly what it is all about - namely the protection of your MONEY... Forget about all those sophisticated words like value adding... now that is a simple way of putting it or what?)

When I wrote my e-book, I used the parable of a bear attacking and eating your business profits (based on the film The Edge... where survivors of a plane crash had to deal with a bear literally looking for their blood in the Alaska mountains), not knowing that a BIG bear market was around the corner, making life extremely difficult for businesses around the globe.

Yes, I did mention the prediction by Robert Kiyosaki and Sharon Lechter of a bear market, expected in a few years time when the Baby Boomers will be exchanging their pensions for cash. However, I never thought that a bearish economy would be around the corner. Never did the thought cross my mind that a BIG BEAR is on its way, attacking businesses across the world! Three years ago, I used this parable to explain threat agents - in and outside a business - that erodes (eats) profits, and why you need to eliminate these "bears" to INCREASE YOUR PROFIT. This argument is, of course, still valid.

However, right now companies are being "attacked" by another BEAR from two directions. The "credit crunch" will make it extremely difficult to obtain credit and venture capital. As a result, job losses will (and have already started to) occur. From the other direction negative consumer confidence leads to a negative economic growth. Not an easy climate to conduct business in... and the fear for a depression is fueled with decisions like the one of Congress not to bail out the BIG 3.

So, by this time I would like to rest my case. Pilots are trained to work through a list of typical problems and solutions when, in a manner of speaking, the red lights go on (i.e. the plane starts to malfunction). Our Small Business Survival Manual is a small business tool that business owners and managers can use to systematically address all their business processes and areas in order to identify and stop profit erosion.

Believe it or not, the huge business opportunity, hidden somewhere in the current recession, is the fact that IF a business owner can manage to put a stop to profit erosion (generally considered by businesses as the more difficult part of business because it is always so easy to just start cutting costs), he or she might be in a position to NOT cut essential expenses (needed to make an outlay in order to conduct business) while keeping prices low... and not having the need to borrow money from a bank or venture capitalist (who doesn't have it or doesn't want to give it to you in any case!).

Our message is this: If you don't have a costume for your business (i.e. if you have been swimming naked) you can still get in the lifeboat. For more information about the benefits of implementing small business profit strategies in your company, please visit: http://www.business-around-the-globe.com

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