Recession? Strategies to win either way

I will leave it to the economists, the CNBC guys and the politicians to continue waging the debate on whether we are in a recession, about to enter one or experiencing a false alarm. I certainly don't have the crystal ball to say either way. In fact, I wish I could feel comfort that they do! The real question is: How will your business continue to make money in any economy we face?

First, merchandise and present your products in a much more “giftable” way. We must realize that in hard times, people may put off major redecorating projects, but their friends and family will still have birthdays, holidays, weddings, graduations and all of the other life events that require gift buying. Take a quick look at any calendar, and you will find a myriad of opportunities to erect signage in your store or, if you're a vendor, present products to your retailers as “Mother's Day assortments” or “Graduation giftables.” Keep in mind many home decor items – vases, candleholders, picture frames, small wall decor, candles or pillows — make great gifts if they are presented in that way.

Next, make them laugh! As humans, we love to laugh and any product we see that makes us smile or laugh automatically lowers our spending barriers. People especially want to buy cute humorous items for babies and pets. Make sure your product — or even your presentation — will make your customers smile.

Give them comfort! Spiritual products have done well for a while now; I look for them to do even better if negative news items about the economy continue. Inspirational books, plaques and bookmarks are some easy choices, but the list is endless of things you can have in your store to give people comfort and inspiration.

What about promotions? Should you mark down everything in the store 20% off? Absolutely not! Pick some key items that make good displays at very hot prices to get people buying. As they say in sales, the first yes is the hardest one to get, and once someone who is a “browser” turns into a “buyer,” she will generally pick something else up as well. Protect your margins on most of the items in your store or line. Use promotions selectively to get those wallets open.

Now that you have made some changes to the merchandising side of your business, let's take a quick look at operational issues that can make life easier.

Generally the biggest expense for any business is inventory, and now is a time to manage it as lean as you can. If you are a retailer, buy from vendors who give you low minimums per SKU so you can have a good assortment of merchandise in your store without a lot of backup stock because you had to buy a case of something. If you're a vendor, use the “recession news” to renegotiate minimum order quantities with your factories and help them understand they are at risk as well.

On the labor side, no one ever feels good about letting employees go, but watch your sales and your area's economy carefully, and make these moves sooner rather than later if things start to slow down.

Finally, keep your chin up! Remember that historically, products that are affected the worst in a recession are bigger items such as cars, electronics, appliances and other high-ticket goods. Generally speaking, this industry has made it through difficult times experiencing fewer problems than most.

In other words, don't let the press convince you that your business should be bad, or it will become a self fulfilling prophecy. Stick to good business basics, and everything's going to be OK.