Defying the downturn: for small businesses, making it through an economic slump takes a good defensive - and offensive - plan of action.

Defying the downturn

The business cycle is turning down. Even economists admit it - most of them - and the rest are just trying to agree on the recession's official start date and how deep it will be.

But if you're like most other small businesses, you already know about the downturn...because new business isn't coming in your door as fast as last year. You may have noticed your old business changing, too. Your regular customers are slower to order and slower to pay, and you suspect they're shopping around for the best price.

Whatever the reason - tighter credit, real estate slumps, layoffs, higher oil prices, and fear of everything from war to peace - it means there are less customers for everybody. Even if you don't lose any customers to your competition, even if you keep your same piece of the market share pie, that pie is shrinking. Bottom line: You do less business.

What are you going to do about it? Quoting cliches is one response: "When the going gets tough....I'm keeping my ear to the ground....Better get your ducks in a row..." and so on.

Another response is to move past the denial and into action...make a new plan, Stan. To succeed, the new plan has to have two parts: defensive and offensive.

Defensive, in that you take some specific actions to insulate your existing customer base against takeovers from competition. Make sure that your regular guys don't become their regular guys.