Rich Works

By Ki Gray

 Over the last year the US, once flying high, has fallen and face planted into a somewhat ugly recession. For people with steady jobs the fear is of course the dreaded pink slip. But as long as they can keep their jobs their paychecks in most cases will remain the same. For small business owners a recession is often felt in the pocketbook. With less people buying their goods and services their revenues and profit margins can start to sink. And it can be painful for a number of reasons.

First many business owners have an emotional attachment to their business. When the business starts to flat line its hard to readjust to the new realities of your surroundings. If you are a restaurateur it might be hard to scrap plans for opening a new location across town even if the economic realties of the market make it clear that continuing ahead with previous plans is illogical. The second difficulty is that it’s hard to readjust ones life to deal with a lower take home pay. So while a small business might see a 20% drop in revenue that could translate to a 40-50% drop in profits. And while you might have lived on a smaller revenue 10 years ago it’s hard to go back to that. Living without regular out of states vacations is one thing going back to that point is even more difficult. And these somewhat harsh realties are what drive people to look for something, anything that can restore their business to its previous health and prosperity.

First I want to point out that in some cases advertising in a recession can be a wise move to increase market share and take advantage of a bad market. But more often what I see is this.

“Our revenues are way down”

“That’s horrible”

“Let’s spend a ton of money on advertising and hope we can put this behind us”

The problem is that the difficulty for this business is not that they didn’t spend enough on advertising last quarter. The problem is that we are in a world wide economic depression caused by billions of crappy loans real estate loans given out over the last few years. And yes everything is interconnected but putting out more ads for a local restaurant is probably not going to change this.

Simply put sometimes business owners make asset allocation decisions based on emotion instead of their current economic realty their business exists in. A few reasons that increased advertising might be a bad idea for your business.

1) The number of potential customers is decreasing

2) In many industries your competitors are increasing advertising to “spend their way out of a recession”

3) Increased advertising and decreased customers is a bad market to ramp up your advertising budget

4) Spending more on advertising can mean advertising in new venues. Often when testing new venues you can wasn’t a lot of money discovering mediums that simply don’t work for your business.

5) You can increase your expenditures and your cash burn rate. So basically the economy might eventually turn around but your business might not be there to see it.

Ok so if the answer is not doubling or tripling your advertising what is the answer? Here is my advice

1) Cut Expenses that are not needed. Comb through your budgets for extras you added during better times but are not needed.

2) Keep current advertising that is working. Whatever is currently providing you business I would stick with.

3) Cut advertising that is not working.

4) Adjust

Number 4 is probably the most difficult but important. If ones business is affected by the recession (and most are) it might be a good idea to simply accept the possibility of a reduced monthly income for awhile. I am not saying people should give up on their business or not attempt to increase profits. But during a recession it might be a good idea to keep working to achieve higher goals but at the same time when you are doing your monthly personal budget accept the possibility that a weakened economy often results in less customers and lower revenue. This means if you planned on buying a new car or taking an extra vacation it might be a good idea to change those plans.

In the end by operating in a logical manner a business can survive a recession and hopefully be in a position to flourish once the economy recovers.

Ki lives in central Texas. His website provides a guide to Austin Real Estate it also contains a search of the Austin MLS and updated information on Mortgage Rates.

Develop A Website For Your Business To Make You Rich

Is The Ability To Pay For A Home Up In Smoke?
By Aydan Corkern

 For a while now, it has been hard to get a house because of money and the economy. People are not getting paid enough, and they are losing their homes. There are too many homes that are empty because no one can afford to pay them. The prices of the homes are too high for them to get, so paying for a home is up in smoke or out of the question. You have to save a lot of money just to do this, but sometimes it can be hard because of all the bills, food, and the gas you have to purchase. There have been more home losses in the past few years than there ever has been before.

Taxes on houses have gone up, and it is making it hard for people to pay them or to keep their houses. When people can’t afford their homes, then they move into apartments or in trailers, and they try to sell their house. It can take a long time before it is sold because no one has the money to buy it. They try to sell it themselves or they try to get someone to do it for them because they can’t get anyone to pay it for the price they are asking for. With the little money that they have, it will make it hard for them to get by, and the banks don’t care if you hardly have any money because all they want is to receive their money or they will take it away from you.

Loans will do the same thing to you because all it about is the green stuff to them and how much money they get in their pockets. They just want to get your stuff paid for. You might have to work more hours or get a new and better job to make ends meet. But finding a better job can be hard, too, because there are hardly any out there that you can get. Like I said, the ability to pay for a house is up in smoke for most people, and it might be this way for a long time. We don’t need it to get worse than it already is. We need it to get better for everyone. If you are looking for a house, then you need to look for one that is a good price that you can afford, but if you can’t, then wait until it goes back to the way it was.

Aydan Corkern is a writer of many topics, visit some of her sites, like

water damage kansas city and water damage Connecticut.

small business websites

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.