Best Practices for Contracting Economies

Our first series of economic news commentary posted today is a wake-up call for all business owners. Here is our analysis of the current market:

• the Dow is headed down to 4000 (another 2500 points)
  
• the S&P Index is headed to 350 (50% of current value)
  
• unemployment will be close to 10% by the end of the year, 20% by the time the market finally bottoms (another 25% increase this year, 3 X the current rate)
• the contraction could last until 2012
  

What does it mean for your business?

1. All of your energies needs to be directed at holding your base; keeping your best (highest revenue, highest margin) customers.
2. Even if you currently occupy this position, you must become the lowest cost producer in your industry.

Holding Your Base

Your customers are experiencing the same market demands, you need to analyze every component of the relationship to improve the value of your offer. They are already discussing it, imagine the impact of a preemptive call from the owner/executive! Image creating a joint team from both organizations to find a way to help them stay in business, and therefore tell you how to improve your offer. They are going to continue to cut costs, why wait until they call you canceling future business.

Lowest Cost Producer

This doesn't mean the lowest price which is a separate decision. It is about doing it better the first time, doing it faster with fewer steps, and improving your value to enhance their success. If you are actively engaged in holding your base, they will provide you with all the information necessary to do it better, faster, with greater value.

One more thing. If you are really interested in radically changing the business and surviving this ugly economy, one more thought. What if you built an open source company? A company that integrates the process of its suppliers and customers to improve everyone's value.

Checkout our Project 1440 blog for details on this new and intriguing business model.