Eight Steps to Survive These Tough Economic Times

In this season of celebration, as you contemplate family, friends, gifts, sales, and scheduling conflicts, it can be invigorating to consider what you appreciate and enjoy most in your life. From our deepest care can come our greatest successes as the title of Marsha Sinetar’s now classic book reflects: Do What You Love, The Money Will Follow.

The deteriorating state of the economy means that many of us will need to change something about our work during the year ahead. These changes may mean you enter a different career field, develop a fresh focus for your business, or start a new company. When your business represents a real passion in your life – a dynamic energy that you share with your world – the day-to-day challenges become far more bearable, you can cause investors to feel enthusiastic about your prospects, and it can be easier to attract customers. 

Since we have no idea what the economic outlook will be over the next couple of years, pursue action now to circumvent disaster later:

• How would you like to earn income if you lost your job? Explore possibilities that excite you. Start to engage in an interest as a part time business to test the water, while you have a job.
• Save money. I know everyone gets tired of reading and hearing this. National consumer saving did start to improve during the last quarter. That may be one of the few positives this recession is causing. Now is the time to stash away as much money as possible in liquid, stable accounts. Ideally, you need enough cash saved to continue your normal lifestyle for six months.
• Build up your credit rating. Pay down debts and pay all bills on time. Use this time to raise your credit scores  as high as possible.
• Take classes or study on your own to develop new skills. Some of us learn better in a classroom environment, while some of us would rather check out a stack of books from the library and devour a massive amount of data from different perspectives to learn something new.
• Set up informational interviews to discuss your professional interests with owners of similar businesses. They’ll tell you the good news and the pitfalls. Until you’re knee deep in alligators, you won’t fully understand a business. However, knowing where those gators are likely to come from before they swim out can be very helpful information.
• Define your target market. Go talk to them. Many years ago, I started a company manufacturing cheesecakes for white tablecloth restaurants in the San Francisco Bay Area. As a result of research on the dessert industry, which I’d managed while working for a major food conglomerate, I knew no one was targeting that market at the time. Before starting my business, I met with restaurateurs to determine what they were looking for – product, price, presentation, etc. And a friend test marketed products on his customers, which turned out to be an all-round win.
• Determine a realistic budget. What will it cost to launch the business and how much income do you need to live while you drive up revenue? So many people start businesses on a minimal budget without sufficient savings or real world financial planning. When the smallest monetary upset occurs they cannot pay their bills. You don’t want to trash your credit. You’ll need your positive credit history to expand your rapidly growing enterprise.
• While access to institutional capital is likely to be more available in the year ahead, excellent credit requirements will probably continue. Planning for the requirements to create a viable and vibrant business will contribute to your drive toward profitability.

Necessity may be the mother of invention, however, taking time to prepare appropriately births much calmer and financially healthier enterprises. You want to organize now so your credit rating remains intact. And you want a fallback position in place to help you thrive through any difficulties you might face as a result of the economic disaster.