Business Resources & Reports, Inc
E-mail dutch@brrinc.org

Weathering the 2009 Recession

  1. The current recession
    1. People reduce their activities during periods of uncertainty and unhappiness.
      1. The nation is deeply divided and we just had a national election to underscore that division.
      2. The current president and media are worsening the national morale by insisisting that we are in a "financial crisis."
      3. The recession, then, is largely a "self-fulfilling prophecy."
      4. A second cause of the recession is the recent price of gasoline. That drew down much if not most of people's disposable income. The price of gasoline has gone down, but fewer people have any "extra" money left over.
    2. The good news is that while the recession is bad news, the causes are good news.
      1. The President's advisors will eventually suggest that his message change from "we're in a financial crisis" to "happy days are here again!"
      2. The dire predicitons in the news-oriented media are that this recession could last as long as 2010.
      3. This suggests that we are in a temporary rather than enduring situation.
  2. There are two goals to help get through a recession such as this one.
    1. Keep up a positive store attitude.
      1. Keep things clean. Start cleaning so that the floors, the windows, the walls and ceilings are neat, orderly, and sparkling clean. This offsets the sense that business is down because of the dwindling inventory.
      2. As you reduce purchasing and reduce inventory, display things so that it does not appear that you are reducing inventory.
        1. Instead of having 12 regular Pringles, 2 BBQ Pringles, 1 Fiesta Pringles, 3 Cheese Pringles, and so forth, buy only and display only the quicker selling regular Pringles and maybe the second fast mover.
        2. Instead of Coke, Diet Coke, Coke Zero, Caffeine Free Coke, Cherry Coke, Diet Cherry Coke, Bat Guano Coke or whatever they came out with last week, make large displays of Coke and Coke Zero.
        3. Completely remove from sight cans of sardines that you and the past three owners have all owned, BIC pens that are so old that the packaging is curling up, Tampax that no one buys, and so forth; however, refill that space with things that are in the store.
        4. Move and nicely display everything that is "in the back" to the shelves.
      3. Talk to your suppliers. Tell them what you are doing. Ask them if they will offer any promotions on the items you are trying to sell more of.
      4. If people comment that you have fewer items, explain to them frankly that you are stocking only the most popular items "until this thing is over." Most people will accept and appreciate your candor and positive attitute.
      5. Tell your staff to say the same thing.
    2. Preserve as much cash flow as you can.
      1. Talk to as many suppliers as you can. Offer to keep current on deliveries and sevices from this month forward and catch up slowly on the past due amounts a little each month.
      2. Personally pay bills or approve bills for at least a month. You will find some unnecessary expenses.
      3. How many phone lines do you have coming into the building and why? I sometimes wonder what would happen if a store pulled all of its phone lines except the one needed for credit card transactions. Do you make sales over the phone?
      4. If you are reducing payroll, your insurance likely should go down. Call your insurance company.
      5. If you reduce hours and post a sign to notify your customers, explain that it is temporary because of the current recession, and give a date that you expect to return to regular hours. I do not know what date to suggest.
  3. Effect on family life.
    1. Count your blessings first.
      1. You might loose 50% or even 75% of your disposable income. That's a lot better than the 100% for people with "regular" jobs that get laid off.
      2. When this is over in a year or less (maybe it will start ending in the spring when people feel confident because of the weather), you will have your "old job." People with higher paying white collar and some blue collar jobs will not be able to return to the job they had. They have to start over a few rungs down.
    2. "We're all in this together."
    3. If necessary, give the children a quick economics lesson. Explain objectively that business goes up or down similarly to a person being healthy most of the time but occasionally getting a bad cold.
    4. While you are probably working more hours and home less, encourage the family to make short visits to the store to see you. If you get home late, at spend a little bit of time with them so that they see you regularly and routinely.
    5. Discuss things with your family in terms of "trade-offs." For example, we are not going to Disney World this summer, but next summer we will go to Six Flags in Houston or Atlanta and the following year we will plan to go to Disney World for two weeks instead of one week.

Good luck and keep focused.

Copyright © - 2009 Dutch Hawkins Mandeville, LA USA - All Rights Reserved

February 5, 2009