More and more signs point to an upcoming recession in the United States. Canada is insulated in two ways - by its booming energy industry (which is mostly western-based, although it generates a lot of activity in central Canada), and by its healthier real estate market.
Nonetheless, the two economies are closely entwined, and the overall slowdown will hurt a lot of businesses in central and eastern Canada.
1) Agile, nimble entrepreneurs can escape the worst of a recession. There are many strong markets in Canada, from energy and health care to affluent, luxury-loving baby boomers. Look for sources of strength, and aim your marketing activities in those directions.
2) Recessions can be a time of tremendous opportunity. If you fine-tune your marketing plan and conserve your cash, you have the opportunity to invest and expand in your market when others are retreating or selling out. Cash is king.
For more managing-in-tough-times tactics, click here for my column from Nov. 2006, Get ready for recession!
3) The federal government showed great timing over the past year or two in orchestrating a series of tax breaks for business. If markets are off a percentage or two, maybe sending fewer bucks to Ottawa will help. The corporate tax rate fell three percentage points last week, and the small business rate dipped from 13.12% to 11%. The GST went from 6% to 5%, and the feds are increasing the rate at which we can write off computers, buildings, and (temporarily) processing equipment.
For more information, see Susan Ward's tax-change update at Small Business Canada.
Things may get tougher. But we've seen a lot worse.