During a recession we all know that people tend to stop spending money because they are worried about losing their jobs or they have already lost their jobs. Not to mention that during a recession it always seems like some jobs are affected more than other jobs, meaning that some business seem to thrive during a recession, some manage to stay afloat and get by, but others simply disappear on the radar. But the true question becomes how do some businesses survive and why do others fail. There is no easy answer to these questions, but there are some tips that you can follow to help your business survive a recession. Here are some tips that your business can follow to hopefully survive a recession. Tip one: Make sure that your company is as upbeat as possible; this includes anybody and everybody who works for your company. In fact the more that people talk about a recession the more likely that it is actually going to happen. So what you want to do is to try and behave as you normally would. The reason for this is that bad news is contagious and so is bad vibes. But the reason that you want to act like you normally do is that when people are thinking about tragic events they tend to stop spending money, which hurts the economy. A great example of this is the events of September 11th, which affected everybody in our nation. People got to thinking about what happened on those days and stopped spending money. Tip two: No matter what you do when it comes to cutting back on some of your costs you want to make sure that you never stop advertising. Many executives actually tend to see the advertising budget as the easy option for budget cuts because it is something that can be cut back overnight. But it is during these bad times that you want to actually capture the hearts and minds of consumers and in order to do this you are going to need to advertise. In fact many robust businesses actually increase their advertising during a recession. Tip three: If you are in a consumer business you are going to want to try and be as recession proof as possible. Basically what this boils down to is that you want to make sure that you are offering a product of acceptable quality at a good price and if you are doing those laws of averages actually state that people will buy your product. Even though people always want to save money during a recession you can still pick up business that comes down from more expensive providers, but keep in mind that you are going to lose some of your business during these hard times. What usually happens is that your business will pick up by people who have extra money because they are also going to want to save money so rather than taking the most expensive route they are going to end up spending less on the same product. For example instead of flying business class on an airline they are going to switch to another airline that charges less for first class. Tip four: If you are in a business that is a cyclical business you are going to want to reduce your volatility by taking as much hedge as possible. A great example of this is a shipping line. This business is a classical cyclical business. So when the economy is buoyant they transport more items and when it is less buoyant they transport fewer items, which in turn means less money. So what you want to do is to take as much hedge as possible, what this means is taking forward contracts for a three or five years. Tip five: If you have a small but efficient you are going to want to look for an opportunity that allows you to leapfrog your largest competitor. The reason that this can work out in your favor is that during a recession it is actually the larger companies that are under more pressure. The reason that they are under more pressure is because they actually have more costs than smaller business, meaning it costs more to run these business than it does to run the smaller businesses. So what you need to do is to take the recession as an opportunity to advance your small business .Tip six: You also need to make sure that you are saving money by practicing good housekeeping. This can actually apply to a variety of different areas in your business, but you are really going to want to watch areas where money is being spent. One thing that you can do to help save money is to make sure that you talk to your staff about wasting money. What you want to do is to persuade them that every time they are going to spend the company money they should actually view it as if they are spending their own money. This can actually help to make people think twice about spending money unnecessarily. Tip seven: If you are in charge of a listed company than you are going to want to make sure that you are always open and upfront with your investors. Keep in mind that investors are risk-averse and what is going to happen is if they don't hear about what is going on from you or your company, meaning if you don't remain in contact with them they are going to fear the worst. So basically you need to keep in mind that communicating with your investors especially during a recession is the most important things that you can do. Tip eight: You can also make sure that you go back to your suppliers to see if you can negotiate a better deal, in fact during a recession this is probably the perfect time to do this. The reason for this is that most likely during the recession your suppliers are getting hurt by other companies, in fact during recessions many businesses tend to quit ordering supplies so that they can save money, which means that your suppliers are facing cancellations. So what you need to do is to talk to your suppliers about what you can do to get lower prices. In fact one thing that you can do if they are getting cancellations is to make an offer to keep your orders the same, meaning you won't reduce the offers, if they agree to lower their prices. Basically you want to look for some kind of a bargain with your suppliers. Tip nine: If you are thinking about launching a new business or expanding your business to include something else you might want to double think that process. This is especially true if you are thinking about something that is considered a luxury because people are not spending the money on that kind of stuff during a recession. During a recession people are not looking to spend thousands of dollars on suits or airline tickets or even on cars they are actually looking for that same thing but at lower prices, they too are constantly on the lookout for a bargain. But this doesn't mean you can't ever launch that business, you just simply need to wait to do that until the economy is up and booming again. Tip ten: No matter what goes wrong in the economy do not cancel any company parties or morale boosters for your employees. Sure this is an added expense that you might not need to have during a recession but it is a great way to show your employees that they are achieving something and that you appreciate everything that they do for you and the company. Basically you want to make sure that you can celebrate whatever successes you have, no matter how small of a celebration it I, because it can help to keep up employee morale which is hard to do when times are tough. Tip eleven: You also want to make sure that you take your business up a notch or two. The reason for this is that during a recession times are tough and you are going to have to be competitive to help ensure that your business is going to be the ones attracting the customers. This is a great time to start those projects that you had in mind to attract more business. Tip twelve: Even if you have to lay off one or two of your employees you still need to try and take it easy on your employees because they are what help the business to work as it does. Keep in mind that no matter what you do during the recession things are eventually going to go back up when the economy picks up and you don't want things to come back and haunt you. Make sure that you keep the good people no matter what happens and that they know why you are keeping them.