Growth in a down cycle?

I just finished a long road trip meeting with clients and our guild members in the MidWest. One thing is becoming very clear, it doesn't matter what the FED says, most our network believes we are at the beginning stages of a recession. There is an obvious fear about discretionary spending. The common theme of the discussion with our guild members is: should we change our message away from growth to cutting costs?

My answer was no and here is why: economic downturns are the time to prepare for rapid growth and here is how I got there.

Using the Business Life Cycle Model and matching it to the economic cycle leads to the following 4 tactics:

1. Begin to look for operational efficiencies. Take a hard look at your processes for delivering products and services and determine if you are currently operating @90% capacity. In other words if everything works as it should, are you building, selling, servicing at a level that is 90% of the businesses capability? If you're not (the right answer 99% of the time) then look to remove all non-value added activities; those things you do to produce, sell, deliver, service that you couldn't add to the invoice. Identifying those gaps between todays efficiencies and what is possible will reduce cycle time and waste, and most importantly improve margins. Imagine if you could charge for everything required to exceed customer expectations!
   
2. Determine which of your competitors that will be hit the hardest by the economic downturn. Who will go out of business or will be so seriously damaged that when the economic trends begins its upward cycle, they will be just hanging on. Look closely at the specifics of their offer: the features of their products and services, and the prime accounts you would like to own.
3. Asses your offer and capacity to deliver on these future sales. Since you have already upgraded your operations (Tactic 1), what additional capacity do you need to add. Use some the money gained from increased margins with existing accounts and build the capacity to sprint out of the blocks.
4. Launch and create buzz. Ready your marketing campaign, you don't need to spend allot of money - just have some in reserve to raise your exposure to the targeted accounts you seek to steal. Most company's who use this tactic upgraded their marketing materials, enhanced their packaging, and bought limited but effective media - like radio or local publications.

When we first built our library of best practices for fast growth, it was apparent the best of the best timed their operational improvements with a downturn in the economy and where ready to sprint when the cycle upturned and drove new sales from their weakened competitor.

Your thoughts?