DON"T PANIC!

The best advice ever, for troubled times, was in the Hitchhiker’s Guide to the Galaxy.
On the front cover were inscribed the words “Don’t Panic”.
The next time I saw these words I was sitting in a cable car between Sentosa Island and the World Trade Centre in Singapore, being rocked violently in a tropical storm. As the lightning flashed around us I looked down at the exit (?) door, and read the advice. “If this car stops, wait, DON’T PANIC”.
There was no handle. No way out. The ground was 200 metres below. We had no choice, but to follow the advice.
During 40 years in business I have seen a few recessions and every time the recovery occurred; it was a time to keep your nerve and focus on survival. It was also a time for action, and with each recession I found an opportunity to change my future for the better. With the wisdom of hindsight I suggest three courses of action.
Survive.
If your business does not survive in the short term it does not have a long term. You have to be conservative and avoid new risk.
Reduce discretionary overhead, but bear in mind, marketing is not overhead. Marketing and sales activity are essential to maintain your cash flow. Reduce your cash outgoings, but not at the expense of sales.
Defer capital expenditure even though efficiency may suffer. Efficiency is not the king when there is not enough work.
Reduce your range by quitting slow sellers. Monitor sales and stock turns more closely.
If you employ staff you need to match the effort to customer demand. You will not survive if you have idle staff due to too little demand. Are redundancies inevitable? What can you do to avoid redundancies? When things pick up you will need these good people, and it will be costly to recruit and train new staff.
Ask them for their ideas. What can they do to generate business? Can they sell surplus stock in some other way? Can they find new customers?
When you are right down to the wire, ask them if they would prefer to work reduced hours at a lower pay rather than see workmates redundant. Yes, this is permitted by agreement in most places.
Prepare for the upturn
Invest time in innovation of systems, improving staff skills, particularly on-the-job training. These are things you don’t get around to when you are flat out busy, but that excuse has vanished.
Don’t contract out stuff you can do yourself, unless this is a relationship you absolutely need to preserve. Learn to do new things, but only if they have a place in your rejuvenated business.
Review your business processes to streamline them. You will find opportunities as soon as you look for them.
Would ISO9000 (Management systems) or ISO14000 (Environmental) improve your market position. Would it open up opportunities to tender that you cannot access at present? Use your time to document and organize your management system. Most of this can be done from the standard and book guidelines available from the library without heavy expenditure on consultants, and you have the time to invest in learning howe to do it.
Look for opportunities.
I suggest this should be a combination of systematic search and serendipity. They will turn up simply because you are looking.
To be worth the effort, opportunities must fit into your strategy frame. Here I assume that you have created a strategy frame, and therefore you can decide what fits and what is outside the frame.
Opportunities lie outside your frame if you don’t have the skills or know-how to make them work. If they are outside your market space, there will be an investment in you getting into that market space.
Opportunities exist at the intersection of some unfilled customer want/need and your capability envelope. If it’s outside your personal opportunity space, it may be fantastic for someone else, but not for you. This decision is a matter of risk. Opportunities outside your frame are more risky, and it's not a good time to "bet the firm" on a long shot.
For example the world is full of people who have “made” money out of real estate price inflation, only to see their paper returns disappear like smoke in the breeze when prices went into free fall. If they over-geared their equity they were operating outside their capability. If they leveraged their paper profits to get into subdivision without understanding the property development business they are on their way to bankruptcy.
Don’t be sucked in by promises of unlimited returns from an investment in someone’s “proven winning business system”. If it was so good why would they be selling it so cheaply? Most of these “opportunities” are MLMs in disguise, and require a continuous stream of sign ups like you to provide the tickets to clip.
And never forget that this opportunity is worthwhile for you only if you have the resources to grasp it. If you are cash strapped don’t borrow to invest in someone else’s opportunity. You have to be able to fund the borrowings out of present cash flow, and that could put your present business at risk.
Even if you can afford it, would you earn a better return in your own business when thing recover?
Finally, never forget the sound long-term investment advice; it’s time in the market that counts, not timing the market.
If you have a sound established business with a good customer base in normal times, and you can survive, time is on your side, even though you don’t know when things will turn around. Use the time to strengthen what you have, and the returns will flow when the economy recovers. DON’T PANIC!
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