Creative Business Solutions for Tough Economic Times - Part 2

The first step to dealing with difficult economic times is acknowledging that they are here and learning more about what they mean to your business. As a small business consultant I am often surprised by how out of touch some folks are about the economy in their community, their country and especially in the world.

In order to plan and strategize for your business during tough economic times, you need to know what is happening in the world, your country and your community. This doesn't mean that you have to read every economic journal and article but you should talk with people in the know (your local economic development centre for example), read the business section of a national newspaper at least once a week, listen to radio news, watch business news and look on the internet. Some helpful Canadian economy sites are:

http://www.canadianeconomy.gc.ca/english/economy/
http://www.economist.com/countries/Canada/profile.cfm?folder=Profile-Forecast

Now that you know more about the economic forecast and trends nationally, will your business be affected? In my opinion all businesses - even essential ones such as food sellers and fuel manufacturers - will be affected, but some will be more affected than others. Let's face it, every business is affected by the health and well being of other businesses. If you own a bakery then the price of your products will be impacted by the global (commodity) price of wheat as well as the rising cost of fuel to get the wheat from the wholesaler to your place of business. The volume of your sales will be impacted by consumers' willingness to spend money on non-essential items (confectionaries and higher priced items, for example).

If your business fits into any of the following categories (or more than one), your business will be affected:

• business is dependent on commodities (wheat, rice, metals, etc) - for example most types of manufacturing,
• business is dependent on fuel-intensive transportation - for example agriculture, wholesale goods, secondary manufacturing
• business is dependent on consumers who are willing to spend money on "extras"
• business is unable to be diversified

In the next installment of this blog, I will discuss ways to plan and strategize for your business.