My most recent column in PROFIT Magazine bears the cheery headline, Get ready for recession!
(Note: readers in Alberta and Saskatchewan can skip the rest of this post.)
I don't think the rest of Canada will slip into recession soon, but it has become a possibility, should energy prices keep rising, the dollar stay high, or US growth stall.
So, realizing that many entrepreneurs today are too young to remember the last recession (or, heaven forbid, the one before that, when I cut my teeth as a business journalist), I thought I would share the 10 lessons I recall from the Great Recessions of the '80s and '90s.
(You can read the more detailed version by visiting PROFITguide. Click here.)
1. Stay liquid. In tougher times, cash is king.
2. If you think you'll need financing, line it up now.
3. Focus on relationships. You'll need the goodwill of both customers and suppliers.
4. Tighten up collection policies.
5. Cut costs now.
6. Get your employees onside. Let them know you're expecting tougher times, and solicit their ideas for increasing revenues or reducing costs.
7. Smarten up your compensation policies.
8. Invest in productivity.
9. Remember that recessions are part of the economic cycle. They wring excesses — as well as weak-hearted or behind-the-times underperformers — out of the system.
10. Pick a niche and expand. Tough times can be a great opportunity for real entrepreneurs to show what they're made of.