What to do in the Event of a Double-dip Recession

Just when we thought the economy might be on the upswing, fears of a double-dip recession have hit both Wall Street and Main Street. The New York Times recently asked small-business owners what they’re doing differently in this time of economic uncertainty. Some good advice can be gleaned from what the entrepreneurs had to say:

  • “I mortgaged plants and put $11 million in the bank, paying 5 percent interest, as an insurance policy because I don’t know if there is going to be another credit crisis.”
  • “[I]f I see that sales start to drop 10 to 15 percent in a week and see that it’s a trend over the next two or three weeks, I’ll start cutting. The water cooler, and other extras like employee lunches, will be the first to go. After that, I’ll consider asking the staff to take pay cuts, which I prefer to layoffs. Last time, I was the first to take a pay cut. I brought my salary down to what I needed to pay rent and eat bologna.”
  • “As economic news worsens, a small business tends to get paid later and later, if at all. I’ve learned that when the going gets tough, you’ve got to stand up for yourself and show that you’re the least likely person to be bullied….We took two steps. First, we hired an ex-Army Ranger who had served in Iraq to chase down receivables….The second thing we did was let it be known that we’ll fight over a $100 invoice….In this economy, you have to get your teeth out and fight.”
  • “We’re just starting a catering company…but we’re doing it in a very slow-growth mode….In the past, we would have probably purchased an existing building and converted it; you know, we would’ve gone out and borrowed a million or two million dollars.”
Have you changed the way you run your business recently in anticipation of another recession? What do you plan to do if fears of another recession become reality?