How to Survive a Double-Dip Recession

How to Survive a Double-Dip Recession
  • Opening Intro -

    The road to recovery from the Great Recession which began in late 2007 has been a long one.

    Home prices continue to decline, unemployment is persistently high and is rising once again, gas prices are pinching budgets and America's debt picture is weak.

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How are you reacting to bad economic news?

Still, no matter how poorly the economy performs, there are always opportunities for enterprising people to survive what may prove to be a double-dip recession. [1]

Surviving the Economy

Even if it turns out that we’ve hit an economic speed bump, amounting to a temporary stall in the economy, the challenges are similar. Let’s take a look at some ways you can survive, perhaps thrive in a recession.

Psychology – Consumers are often spooked by bad news and react accordingly. If you’re in business for yourself, you may be tempted to do likewise. After all, the economy is going south and you’re going to lose everything, right? That approach is what your competitors hope that you will take. When people are reactive, others are proactive. Carefully consider your options and how you can exploit a bad situation. While others are screaming, “Retreat!” you can yell, “Advance!”

Resources – What is your financial picture like? If you have sufficient savings and are still earning close to what you’ve been making for the past three or four years, then you may have what it takes to ride out the storm. Put off raises for several months and ask suppliers to hold their costs as well. Or, if suppliers cannot hold costs down, consider giving your business to those who can. You may may be using 4 or 5 suppliers at the moment, but if you cut back to 2 or 3, you may find that your remaining suppliers are able to offset their price increases when you buy in bulk from them. Of course, delaying raises for your superstars can backfire – the moment something better comes along, they’ll bolt.

Politics – At some point, the recession will end. There are a number of scenarios that may unfold to hasten that date. President Barack Obama is finding himself increasingly isolated and opposed as his policies have done little to shake America’s financial discomfort. If Obama doesn’t change, then the electorate most likely will fire him in 2012, bringing in someone who will bring about reform leading to economic growth. Waiting until well into 2013 for change to kick in is not a prospect many of us relish. However, that gives savvy business owners two years to prepare for the coming economic uptick.

Planning – What can you do to plan for the future? Writing for the Bloomberg Businesweek, Kevin P. Coyne, senior teaching professor at the Goizueta Business School of Emory University and a co-founder of The Coyne Partnership says, “Organizations whose leaders look ahead to opportunities that will follow a grave crisis will have a competitive advantage when it’s over.” [2] Coyne advises business owners to avoid getting caught up in short term operational strategy at the expense of long term planning. When the economy does begin to recover, those businesses that have put its plans in place will be able to hit the switch and move forward faster.

Media Agenda

Always keep in mind that some people have an agenda in mind when presenting the news, particularly bad news. This doesn’t mean things aren’t tough, but as the saying goes – “When I was handed a lemon, I made lemonade.” Fresh squeezed, anyone?

Resources

[1] The Weekly Standard; Economic Speed Bump or Double Dip Recession?; Irwin M. Steltzer; June 4, 2011

[2] Bloomberg Businesweek; Up from the Rubble: Post-Recession Planning; Kevin P. Coyne; October 3, 2008

Photo: Morguefile

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Categories: Money News

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".