What Would You Do If You Knew A Downturn Was Coming?

I’m not saying one is, but I think we all get a tad nervous when things are this good for this long. It’s like the good gods have held the bad gods down long enough…and every so often they have to unchain them and let them wreak havoc among the firms who don’t deserve it. Then they get chained up again and can’t have their way for another few years.

I see no imminent sign of a downtown, but it also feels a little fragile to me. Our world is so globally interconnected, too, that we cannot assume that we won’t feel the impact of something that happens elsewhere.

At the moment I’m quite bullish on the future, but what’s the downside of being prepared? There is none. To the well run firm, there are actually some significant advantages to a downturn, though I wouldn’t go so far as wishing it on anyone.

So if you knew a downturn was coming, this is what you might do:

• Employees. Consider a one-time bonus rather than a permanent salary increase. Or keep using that contractor for a bit longer rather than bringing them on staff quite yet. Take a long, hard look at the employee you’d never hire again given their cultural fit or relative contribution or compensation demands. Embrace turnover as a way to freshen things up instead of fighting so hard to keep people you may not be able to afford.
• Facility. Do you really need to spend that much dead money on leasehold improvements? Are you sure you should make a 10-year decision on needing that much space? Could you sub-lease a part of the space you have?
• Lead Gen. It takes a long time to spin-up the lead generation flywheel, and it needs a little bit of love every week, too. Are you doing your part proactively? Can you focus on one or two effective things to always be a step or two ahead of whatever the marketplace will give you on its own? You probably have the right ideas, but it keeps getting pushed aside. Maybe spend Friday mornings at home, instead, and shut email off while you implement your own future right now.
• Finances. Pay down debt. Build a cash cushion. Understand your business in a fresh way, and on one single page. Update it every week and see the trends. You don’t need more data–you need better data.

When and if one hits, be recklessly decisive, do not water down your positioning, highlight profit and not cash flow, and do not borrow money. View it as one of those painful but clarifying moments that force you to think precisely again.

Meanwhile, keep counting the money and enjoy these prosperous times.

If a downturn does hit, you might want to read this article on navigating a downturn; or you might read this article if it’s related to the loss of a gorilla client.

Get to work, my friend. Sit down this week–even for just a few minutes–and chart out the changes that you need to make.