Crisis Survival Kit: 6 Recession Mistakes You Can't Afford To Make

Failing To Face Reality Pay attention to the facts of your specific market. The facts are unique to every business, so forget the national economic news and conduct a fact-based assessment of what is really happening in your market. Reality might suggest your business will not meet your normal growth expectations. It's been a long time since we've seen an overall economy like this one, so buffer your normal optimism and stick to the facts.

Trying To Sell Through It Some owners will stubbornly refuse to accept anything less than the pre-determined growth goal, so they put a full court press their sales team with unachievable goals. When you're worried about shrinking revenue, it feels counter-intuitive to cut selling expenses but, if you're not cutting sales expenses in the face of a shrinking market, you are simply increasing the cost of an average sale.

Delayed Cost-Cutting Cash is mandatory in a down market because profits are tougher to come by. Making the tough decisions early in the down cycle puts you in a stronger position for the rebound. Keep your powder dry for the recovery. A strong balance sheet - particularly cash - translates rebound resources. A weak balance sheet will send you into the first two years of a recovery trying to rebuild your financial health.

Decision Freeze In this particular recession, we have seen an unusual level of fear and panic. With the overwhelming negative national news, we're seeing some business operators simply frozen by the uncertainty. It's very possible you could be missing an opportunity for breakthrough success, because the gloomy headlines can cause decision paralysis. We can't control the market but we can change how we react to it. A successful business must always remain proactive.

Failure To Plan A common misconception about business planning is that it requires predicting the future. If necessary, make three budgets (best, worst, and likely cases) and then be prepared to quickly adjust your costs to the worst-case budget. Planning is allocating your limited resources to maximize results. Planning is about action-what action are we planning to take?

Failure To Lead Great leaders know when to light a fire under the troops and when to calm them down. No matter how panicked you feel inside, today is the time to lead with steadiness and a calming attitude. When employees work in fear, productivity suffers. You need your best people to feel secure and stay focused on their work. Organizations that stay fact-based, pro-active, and steady will do well in this market. Strong leaders will distinguish themselves by their success.