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HOW TO SURVIVE THE CURRENT ECONOMIC CLIMATE

The current economic climate has many small business owners worried. This economic downturn fueled by the media may be enough to make some small business owners feel that they should just give up. But things will get better and in the meantime it is important to think of planning for the future by making a few wise business choices.

Arizona's economic climate according to Marshall J. Vest, Forecasting Project Director at the Council of Management at The University of Arizona, is one of the most cyclical and volatile in the Nation due to a more extensive period of growth before the beginning of the economic downturn. Arizona's downturn began in August 2007 in the housing and credit industries.

Homebuilding in Arizona is depressed and employment in construction, manufacturing, information, employment services, financial activities, transportation, and warehousing is declining. In the past 12 months sales have declined by about 2.5%. Production and orders are down.

If this indeed is a total recession, it will last about eight months according to Vest, and be milder than average. Arizona's recession should also be mild with the bottom predicted for the second quarter of 2009. Vest states that it will be "late 2009 before the good times start rolling again." Nevada and California have similar economic climates as Arizona.

In light of this information, here are a few tips to help you in this economic downturn and to help boost your spirits as the going gets a little tough.

1) Don't let the news media influence your business decisions. Take stock of your own financial climate. You might be doing great despite this economic downturn.
2) Budgeting is the key to staying afloat. Make sure to budget all expenditures and all income. If the costs of some products are higher now, make sure to include in your budget. Plan ahead for a year of slower business. If the recession turns around sooner, you will reap rewards.
3) If gas and oil prices are higher, do some comparison shopping to get the best deal possible.
4) Find ways to save money. Use public transportation or carpool instead of driving.
5) If you are renting an office, but the work you do could be done at home, open a home office to save on rental expenses and overhead. This can also cut down on driving expenses.
6) If business is slower and you have fewer customers, begin to cut back on some expenses such as hired help, utilities, and miscellaneous expenses specific to your business. Lay off employees. Try saving on electric and oil/gas by using energy efficient light bulbs and appliances.
7) Reduce advertising that is costly and try advertising such as telemarketing. Stick with loyal customers for repeat business.
8) Suppliers can have different prices. Shop for suppliers that offer the best prices.
9) Be persistent and don't give up.
10) Don't use up personal savings in lieu of missing income. Keep your personal savings, budget, and reduce expenses.
11) Keep up with all personal expenses such as your car loan and mortgage.
12) Utilize credit cards in a business efficient manner. Use for small loans. Keep payments on time. Use credit cards that offer cash back rewards, airline rewards, no annual fees, and low interest rates.

According to Andrew Johnson of the Arizona Republic (April 29, 2008), a recent survey states that 39% of small business owners plan to hire more employees in the coming months and only 8% talked of downsizing. So it looks like most Arizona small business owners are not too worried about this economic downturn.

Reference:
www.azcentral.com/ar izonarepublic/business.article s.0429biz_talker0430.html
http: //ebr.eller.arizona.edu/azecon omy/

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