Subscribe to Blog ContentI'm not going to mislead you into thinking things are better and hunky dory. In fact, the economy dropped at a 6 percent annual rate at the start of this year. According to University of West Los Angeles School of Law Professor M. Jonathan Hayes, Chapter 11 bankruptcy filings also went up at least 9 percent first quarter 2009 over last quarter 2009 (source).
Though the economy remains stormy, many businesses continue to survive and some even flourish. University of Michigan's monthly consumer sentiment survey reports two pieces good news. First, consumer sentiment went up in April, the first time this has happened since mid-2007. Second, consumer spending also climbed in the first quarter of 2009. A search for "confidence" or "consumer confidence" in Yahoo! news yields many headlines reporting confidence is higher.
Some businesses that remain standing are enjoying an increase in business because of competitors closing. Furthermore, lower gas and grocery prices also help. Unfortunately, these may be a temporary shot in the arm because gas prices have already started climbing a little.
So how do these businesses do it? They cut costs to limit expenses and keep prices low enough for people to afford it without putting themselves out of business. Others have a niche market that is recession-proof or targets those with high incomes. Businesses also remember to build a relationship with their customers. After all, it's cheaper and easier to keep current customers than seek new ones. Happy customers remain loyal.
Look for what's doing well and what's not doing well. Perhaps, that's an opportunity to build on. Businesses must be flexible in this market. The market won't bend for businesses. Diversify your business. Several business owners say that putting cash back into the company makes a difference. Otherwise, the business ends up running on fumes and eventually goes bankrupt.
If you run a retail business, maybe you need to lower your stock or change it up. Some cafes change up what they sell. Oil and gas companies may find opportunity by switching from coal and oil and going with natural gas.
It's a good time to make use of all the spreadsheets like cash flow statements to identify patterns in your cash flow going out and coming in.
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