Surprise! We’re in a Recession?
When the breaking news alerts resonated over the airwaves, in the newspapers and online, announcing that our economy has been in a recession since December 2007, I honestly don’t think that anyone was caught off guard and surprised by this verdict. There were far too many indicators that consumers, economists and companies saw rising over the horizon for a few years now.
So, who was it arriving at the official conclusion that our economy was in a recession? Who else, but the NBER! So just what is the NBER? It’s the National Bureau of Economic Research founded in 1920. And what do they do? The NBER is a nonprofit, private nonpartisan research organization dedicated to helping us understand how the economy works. They consist of representatives from leading U.S. research universities, major national economic organizations, economists from business, trade unions and institutions of higher education.
How did the NBER reach the conclusion that our economy was in a recession? As they monitor and disseminate unbiased economic research, the organization believes that domestic production and employment (through payroll employment measures) are the primary measures of economic activity. A significant decline in economic activity found in production, employment and income are a few indicators that a recession is in full swing. A recession begins when the economy reaches a pinnacle of economic activity and ends when the economy reaches its lowest point of activity. The economy experiences an expansion during the time between these peaks and valleys.
So, now that we’re in a recession, what do you do? The first thing that you don’t want to do is panic. When you panic you tend to lose focus and control. Now, this does not mean that you take your eyes off of reality. We must be mindful that there is not a magic wand to wave that would lead us quickly out of a recession, which took years of gradual economic decline to build up. It’s that pink elephant that’s been hanging around for quite some time now, starting out as a cute baby and now grown into an obese adult that’s sitting on top of us. Thus, we find ourselves sick, depressed and hopeless. Our aches and pains are escalated by our elevated body temperature and we catch ourselves hallucinating, hyperventilating and engaging in unhealthy behavior.
How does your small business stave off these economic ailments? Give your business a physical examination, the same as your doctor would when you are scheduled for your annual checkup. The doctor can’t give you a diagnosis until he asks questions to get you to tell him what’s wrong. After examining these problems, then the physician is able to prescribe medication or therapy that would help you to get better. Why not treat your business in the same like manner? You have to analyze what’s wrong in order to give your business the medical attention that it needs. You will have to lower your intake of certain business pathogens and strengthen your company’s immune system.
Let’s prepare to examine these critical four areas that you initially had to analyze when you started your business. Remember the SWOT Analysis that you included in your business marketing plan? Did you do a marketing plan? Well if you didn’t, it’s never too late to compile one. If you did devise a marketing plan, then perhaps it’s time to revisit the contents. If you don’t utilize a marketing plan to get financial support for your business, it can become a valuable blueprint for operating, analyzing and improving your business. The SWOT analysis is an assessment of your business that’s divided by four quadrants:
What are the “strengths” of your business? You should have at least four. Is it the quality of the products or services you offer? Is it your outstanding customer service? Is it your affordability? Is it your expertise? What are the things that make your company unique? You want to continue keeping this quadrant physically fit because it is the area that differentiates you and your business from your competitors.
When you are diagnosing the health of your business, you must ascertain what your “weaknesses” are. Is it the reliance on outside investors? Do your company lack visibility and brand awareness? Do you have a limited marketing budget? Is your business seasonal? Do you have a small production or sales staff? In order to strengthen your company’s operational immune system, you have to realistically ask the necessary questions that are weakening your business’ infrastructure.
Before we continue with the last two quadrants of your SWOT analysis, invest in a three-ring binder to organize your company’s tactics in. Depending on what type of binder you purchase, which you really don’t need to spend a lot of money on (a $2.00 – $4.00 investment), designate this binder as your Op’s (Operational) Management Guidebook. Keeping a file on your computer or a backup flash disc is fine, but in the event of a technological glitch or damaged file, you will have a hard copy backup to refer to and evaluate as needed.