Pinoy Entrepreneurs

When there is a drought, most farmers pray for rain. Will that make rain pour from the heavens? No and the same thing will happen when you are stuck in a rut during a recession. You just have to wither out the storm because this is the only way you business will stay afloat.

No matter if your business is small or large, marketing is the best way to get your message across to the people. During a recession, you have to make cuts in the budget and instead of spending more on advertising, it is best to use this money in retraining your staff because customer service is key when you want to set yourself apart from the competition.

Cuts should also be done in terms of how much you get from the business and if you are the owner, the best way to do that will be to lower the profit margins until such time that you can put them to normal levels.

By doing that you are able to satisfy the most important person you will ever meet in your business and that is the customer. Another solution will be to offer sales and discounts as this ensures their loyalty.

If you have to answer to shareholders, tell the situation even if they already have an idea how things are. You just have to reassure them that things will improve. After all, a recession is cyclical so they will soon get a return on their investment.

During a recession, a lot of businesses will retrench their workers and close down several offices. If you are a gambler, this is the best time to buy new equipment and try to take a larger share of the market. If you decide to do this, make sure you get a fixed rate so won’t have a problem paying for these goods.

You might think that most banks are not willing to lend people money but thanks to the bailout, you are able to do so. You just have to tell the bank what steps you are taking during the recession so they know what you are doing and understand that the steps you are taking are for the long term.

Should business be really tough and cutting expenses be not enough to help your business stay afloat, you should be prepared to let some people go. When you do this, make sure you are only dismissing employees who can easily be replaced when the crisis is almost over.

If you want to reach out other customers, create a website so you can offer your products or services to other towns, states or even countries.

When you get to have your own business, you are at helm. No one is going to tell you what to do and you are expected to be the one to set the direction. If you have doubts as to what you can do to survive a recession, don’t be afraid to ask other owners what steps they have taken. Sharing this information is beneficial to both because no one wants to throw in the towel.

A recession affects everyone and it does not matter if you are employed or you are running your own business. How badly things get depends entirely on your financial situation so you just have asses it first before taking any appropriate action.

Setting up an emergency fund will be very useful especially when there is a recession. This will enable you to survive several months without worrying if you still have money to buy stuff especially when there is a slowdown.

But when it hits you, cleaning up your balance sheet is just one way to survive the financial crisis. To help you along, here are a few other ideas which you may find useful.

In 2008, the unemployment rate grew by 6.1%, its highest level in 5 years. The last time it hit this mark was in 2003 as the economy was still recovering from the 2000-2001 recession. These job cuts happened in the airline, travel, retail and service industry just to name a few. If you happen to work in one of these industries, you should probably consider a career shift to an occupation that is more stable even if it means going back to school.

Going to school is not an option if you are raising a family. The next best thing to do will be take an extra job. Just make sure that the time you spend here does not affect your primary job otherwise, you could lose it.

Most Americans have invested in the stock market and if you are one of them, don’t panic and think about selling it just because things are down. You have to remember that a recession is cyclical so your portfolio will recover in the future. You just have to be patient because it is going to take several months before everything is back to normal.

But if you do have the money, now is the best time to buy stocks and bonds. Why? Because these are relatively cheap and you can cash it in when the economy is back on track.

Apart from going back to school and getting a second job, perhaps you can use your skills and then offer this as a service to others. If you like to cook, make some pastries and then sell these to potential stores. If you are good with your hands, maybe you can help repair leaks should your neighbor have a problem with their plumbing.

If you own an SUV, trade it in for a small vehicle because you get better mileage with a smaller car. If you have the money, see if you can get one that is a hybrid because apart from consuming less gas, you get tax breaks for investing in alternative forms of energy.

When you go to the grocery, only buy the essentials. Resist the urge to buy things that the kids want. If you can’t say no, try to get a similar brand that is just as good as what they want.

Lastly, we all have bills to pay monthly. If possible, switch to better and more affordable services because each penny counts during these dire times.

There are other ways to survive a recession apart from those mentioned. By following these tips and getting advice from a financial planner, you are sure to wither out this storm. Until that day comes, you shouldn’t live in fear but rather make the most of it because this isn’t the first time that you will face a recession and it surely won’t be the last.

What is a recession? This happens when there is a significant decline in the economy which usually lasts for a short period of time. You can tell there is one when consumers don’t spend that much, a lot of people are unemployed, companies have to make job cuts, industrial production is down and lately, there is a housing crisis as people have to foreclose their homes.

The technical indicator which tells you that the country is in a recession is when there has been 2 consecutive quarters of negative growth which is measured by the country’s GDP or gross domestic product.

Experts say that this is bound to happen because it is part of the business cycle and things usually improve within 16 to 18 months.

What is a business cycle? It is considered to be a periodic but irregular up and down movement in a country’s economic activity which can be measured by fluctuations in the GDP as well as other macroeconomic variables.

Things are going up when the economy recovers and expands. The situation goes the opposite direction when the market experiences a slowdown until it eventually reaches a recession.

The last time the United States had a recession was in 2000 and this lasted for three negative quarters until 2001. Experts hope that the same thing will happen right now but this could change as the stock market has had a roller coaster ride these past few weeks and a bailout which was just approved recently will try to make things better.

But there has never been such a drastic move when the country was in recession. In the past, lowering interest rates was the solution. In 2007, the Federal government slashed the interest rate three times towards the end of the third and fourth quarter so that banks could get overnight loans for as low as 4.25%.

The recession in the United States has affected other countries and drastic steps have been taken to prevent it from getting worse. Britain unveiled plans to inject up to 50 billion pounds which is equivalent to $90 billion into its biggest retail banks. Members of the European Union agree that there must be reforms in the world’s financial system.

Is there light at the end of the tunnel? The answer is yes but it is going to be some time before anyone will see any improvements. In fact, this crisis will continue on to whoever wins the Presidential election next month making it one of the key issues.

During the last three debates, both candidates were asked what they are going to do to fight the current recession. One of them insisted on tax cuts while the other believes that another approach has to be used.

Whoever wins, be it McCain or Obama that person better have a plan so people who are unemployed will be able to work and the current state of the economy will improve. It is something that the American public will be looking at during their term as president and when the dust settles, only then will people be able to say whether or not this person was the right one for the job or they should have voted for the other candidate so we can get out of this recession.

There is no doubt that we are in a recession. What you have to answer for yourself now is what are you going to do about it? On your own, you can change it but you can adapt to the situation until things blow over.

Now how do we do that? Well the best thing to do is tighten your belt because the credit market is frozen so you won’t be able to get a loan for personal or for business purposes.

With the money you have, it is best to use it wisely by buying only the important items when you go to the grocery. If there are other items you want to go get, you have to sacrifice in order to get it by buying different brand that is more affordable. Since most supermarkets have special offers, give out free vouchers or samples, you should also avail of it.

Do you drive yourself to work? If you do, has it ever occurred to you how much you spend on gas everyday? If you drive an SUV, chances are you spend a lot on gas just to go to and from work. Part of tightening that belt means trading in your SUV or a smaller car. If it is possible, go for a hybrid because you save on gas and get a tax break from the government.

Most people eat out during their lunch break. Instead of buying food, why don’t prepare it at home and then bring it to the office. That way, you don’t have to spend your hard earned dollars for lunch so you can use this elsewhere.

Your employer is aware of the current financial crisis. You can help him or her by suggesting if it will be possible to do some of the work at home. Some companies allow their employees to do this so just have to check if this scenario can work for you. Just be sure that you are as productive at home like you are in the office.

But because you spend more time at home instead of the office, your electricity bill will surely go up. To try and resolve that, the best thing to do will be to replace your lighting fixtures with those that consume less wattage. Since you have a landline and mobile phone, you should change this with a provider that offers better rates than what you are currently paying for. The same goes for other bills that pay monthly.

With all the money you are able to save, you should use it to pay any outstanding debts that you may have with the bank to ensure you have a good credit rating. You can also use this to take up a training course so you or go back to school so you will be able to shift to another career if the current one you are in right now is not working out.

The current recession isn’t going to end by Christmas since it is forecasted to last until next year. For you to survive, you have to tighten your belt. If you don’t know how to do this or want to learn more, it is best to hire a financial adviser who can come up with a plan so you can just follow it.

Almost every business will be affected by a recession. If you don’t take the appropriate steps, you will have to file for bankruptcy and close. Fortunately, there are things you can do to prevent it from happening.

Focus on customer service. In any business, you have to entertain the customer so he or she will be able to buy from you. If you do this well, that person will come back and buy from you even if times are tough.

How do you focus on customer service? By retraining your staff and making sure they understand that this is the only way for your business to survive. Believe it or not, these people who you hire are the front line and if they don’t do well, the customer will just go in and walk out without buying anything.

You can train them by hiring someone from the outside to handle a seminar or workshop. If this is not within your budget, do it yourself and also give them a refresher course on the products or services that you are offering.

What is at stake for them? Their jobs because you can either keep them or put them out in the street making them one of the 9 million who are now unemployed in the US.

But this is not enough. Since you are the boss, lead by example. Work longer hours because your staff will see the amount of effort you put in and with that, nobody will have the right to complain.

If you had to borrow money to start your business, see if you can pay these loans in full. If there are other things you need to buy, see if you can get longer credit periods or better rates so large expenses can become smaller ones making it easy to manage.

Cash is hard to have during a recession. If your business does not use credit cards, now is the best time to get one because most people carry less than $500 in their wallet and have two or three pieces of plastic.

One of the hardest things to do during a recession is to cut down your profit margins. By doing this, people will be able to buy more. When things are improving, you can return these back to their normal settings.

During a recession, you must still be able to promote your business. You can do this by finding other ways to advertise like creating your own website or distributing flyers instead of paying for ads in the newspaper or billboard.

There are other ways to stay afloat during a recession and you may not have the answers so talk to other business owners and see what they are doing. Some of the steps they have taken may be applicable to your situation and you won’t know that until you try.

The current recession is not only a problem in our shores but also around the world. As you are reading this, companies are continuing to cut jobs and those who are having a hard time paying for mortgage are losing their homes. You could lose your business if you don’t take drastic measures because this is the only way for you adapt with the situation and survive.