Are you in recovery?

Last year, we watched the economy melt down. Some saw it coming for a while but most people started to get worried around August or September and then we fell off the cliff in November. It has been bad for many, many people.

While there is still a lot of effort to be put into climbing out of this hole, we are hopeful that economists are correct in their prediction of a current economic recovery. While I am not an economist, I am an avid reader and I watch the trends and signs closely and everything does indeed seem to be pointing in the right direction.

So, if that’s the case, are you in recovery mode?

Here’s what I’m talking about: During the darkest depths of the recession, many businesses stopped spending to save on expenses. They redoubled their efforts to drive income (although the wise person will note that if everyone is watching their spending, they’re not buying, so increased sales effort doesn’t always work because it’s a vicious cycle).

And things are turning around and will boom again within the next couple of years. Unfortunately, many small businesses will wait until things are booming again before they finally unlock their wallets to begin buying. That’s a bad strategy. If they do that, they miss out on the highly lucrative growth period between the depths of the down market and the heights of the up market.

So, how can you take advantage of this growth period?

1. Start by investing in your business. Customers are starting to buy again and your business needs to be fresh and ready to serve them. Is your website up to date?
2. Slowly increase your inventory. You don’t have to create a huge backlog, but orders will start coming in and you’ll want to have some inventory to sell. (Colleagues of mine who are service providers are booking up weeks and even months in advance now).
3. Prepare for increased capacity, perhaps by hiring and training additional staff or developing systems and processes that will increase efficiency. It’s best to do this now while you are still a little slow and only just starting to pick up rather than waiting to be bombarded with orders before you do something about it.
4. If you have a good system of upsells, cross-sells, or incremental sales, then lower your prices to generate more marketshare right now. If you don’t have a good system of upsells, cross-sells, or incremental sales, then put one in place first.
5. Consider raising your prices. Don’t make too big of a leap but bump them up slightly in the next six months because, if the market blossoms in the next couple of years then your prices will already be where they need to be.

Now is a good time to start spending because you’re probably beginning to get some more income coming in but many prices are still low because there are lots of businesses still in “recession reaction mode” with extremely low prices to stay afloat.

Lastly, this is the perfect time to stop and look back over the recessionary period and think about what you learned. Are there things you’d do differently in the future? It could be as simple as melting down emotionally at the beginning because you thought that the world was about to end but realizing one year later that business marches on and you’ll be okay. Or, it could be slightly advanced, like the top ten things that you need to do if a recession were to strike in order to stay profitable. Once you’ve figured out what that “if it happened again” list is, write it down, put it in an envelope, and on the envelope write something like: “In Case of Emergency, Open Envelope”. This is your recession survival guide and it will help you to keep a clear head if and when the economy flushes down the drain again.

Good luck!

Related posts:

1. Embracing the recession
2. What’s stopping you?
3. A Year in Review
4. 5 Things You Need to Do In Your Small Business Right Now
5. Mastering Sales and Selling More -Part 1