Anyone who follows news on the economy knows the picture isn't great: a volatile stock market, a mortgage crisis, a credit crunch. If we were living in Paul Revere's day, we'd probably eventually see a man on a horse racing through our towns and cities shouting, "A recession is coming! A recession is coming!" Still, we get it. So, how should smaller businesses get ready for the inevitable?
Anyone who follows news on the economy knows the picture isn't great: a volatile stock market, a mortgage crisis, a credit crunch. If we were living in Paul Revere's day, we'd probably eventually see a man on a horse racing through our towns and cities shouting, "A recession is coming! A recession is coming!" Still, we get it. So, how should smaller businesses get ready for the inevitable?Business Week has an interesting article on how a smaller business can "recession-proof" itself.
There is lots of good -- if somewhat obvious -- advice: Don't be caught off guard, set inventory targets and keep in continual communication with your sales and operations staffs, stay in close touch with your customers, and develop strategies to get more customers.
But the one piece of advice that almost seems counter intuitive, but really makes a lot of sense, especially for IT managers is this one: Spend on hiring.
Writer Karen Klein quotes Tom Gimbel, CEO of Chicago-based staffing and executive search firm The LaSalle Network, to explain this bit of advice. He says, "Business owners should hire -- not fire -- during a recession." Why? Because, says Gimbel, economic downturns are usually short in duration but he emphasizes that they could lead to smaller businesses losing the big picture of long-term growth. Klein quotes Gimbel: "It's easier to invest training time for new hires during slower growth periods. Employees that are fired during a recession will have to be re-hired -- which costs companies a lot more money in the long run."
Also, Gimbel points out -- and every smaller business competing for tech talent with larger companies knows -- a great way to get good staff is when bigger companies are experiencing layoffs. "This is a great time to find top performers who will help bring your company to the next level," says Gimbel.
The economy is heading down a rocky road but if smaller businesses know how to take advantage of the situation, focus on their goals, and put a solid team in place, it could ultimately lead to long-term growth and success.
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