Recession is in the air. It isn’t here for sure, but, damn, when you pay $50 for two coffees and a tart in Paris you know your economy isn’t healthy. Add in the latest energy prices and you see we’re almost definitely going to have a problem over the next year with inflation (compounded since many of our goods come from overseas and our dollar is buying less and less — dramatically less we found on our latest trip to Europe).
If recession and/or inflation is coming, now is the time to prepare. How?
1. Get some income from overseas. The dollar is weak, but that means that non-US people are going to want to pay for your work rather than hiring their countrymen for a higher rate. So, take advantage of it. Don’t think this is true? Visit a national park this summer in the US and notice that there’s a lot more Europeans visiting than last year. Why? Their Euros buy a lot more of our stuff than they buy back home. Tons of geeks on our trip told us they are begging their bosses to go to US so they can come shopping.
2. Cut expenses.
3. Lock down clients into longer-term contracts. Even give them some concessions to get them to renew their contracts, or extend them.
4. Ensure you’re seen as valuable at work. Do an honest assessment. Are you really in the top 10% of all workers at your company? That’s where you want to be to avoid the layoffs.
5. Network more than usual. You might get laid off and you’ll want to network as much as possible so that you’ll have a friendly network to help you find new work.
6. Watch the job listings. They are leading indicators of the health of the economy, plus you might see a job that will help you survive (I got my job at NEC during the depth of the last downturn by watching Craig’s List).
7. Dust off your blog. Especially if you get laid off. Try to own a niche. You might get noticed and you might get a new job because people are seeing you excited about something.
8. Start a company. During the last downturn I saw quite a few people start companies and they got richer as the economy got better. Same thing happened in the early 1990s when Fawcette Technical Publications got started.
9. Move to a bigger company (or if you are there already, think twice about leaving). Big companies can survive the downturns. IBM ain’t going anywhere. Either is Microsoft, Google, Apple. Even Yahoo, which has seen its troubles lately, isn’t going away, although it might shed lots of employees (if you’re going to work at a big company make sure you read #4 again — really valuable employees rarely get cut and if they do their reputations help them bounce back on their feet).
10. If you are in a big company, join a group that isn’t going to get cut. Scott Guthrie’s group inside Microsoft, for instance, is a lot safer than lots of other groups.
11. If you’re in a small company, get real friendly with two groups of people: First, the salespeople. If they start leaving you know the business isn’t seeing good revenues. Second, the CFO or financial people. Better yet, try to get your fingers on the books and understand them. At Userland, during the last downturn, I practiced this and ran the books and paid the bills. We still ran out of cash, but I knew about it three months ahead of time so I was able to mentally prepare for the day I’d have to lay myself off.
12. Look at your stock portfolio and make smart moves. I know lots of you don’t look too closely at what you’re invested in. Lots of people really got hurt last time there was a downturn in the stock market. Are you diversified? Do you have more than a small percent of your portfolio in any one company? Have you sat down with a financial planner lately and talked through your portfolio?
13. Try to get into hot new markets. Russia, for instance, is flush with cash because of the high oil prices. Are you expanding operations there? Can you?
14. ComputerWeekly is recommending CIOs get two budgets together and look for redundancies that companies can cut.
15. Work the basics: build a cash reserve; manage inventory; renegotiate your llease; reward loyal customers; build value — these are all suggestions by Scott Barancik that I found on a Google Search for preparing for recession.
16. See where you stand in the story line. That advice comes as part of a “Prepare for Recession: Just in Case” post by Bill Conerly who does the Businomics Blog. He has lots of other good advice over on a post about what families can do to prepare.
17. Write a blog about how to brilliantly sail through a recession. That way when people start to feel its effects they’ll find your post and your increased traffic will potentially make you some advertising money or at least some new friends who valued your advice. Heheh.
18. Clean up your balance sheet. That’s what the Wastrel Show recommends.
19. Keep your ear to the ground, Money Central recommends.
How about you? Do you have any good suggestions? Are you preparing for economic troubles ahead? Why/why not?
Oh, and please remember those who are hurt by this economic downturn. The stories that are starting to come out are not pretty. If nothing else, join Jeremy Toeman in volunteering to help those who are less fortunate. I will be.