What To Do In A Recession

Published: 2/20/2008 10:41:00 AM

It looks like the US is entering a recession.  What do you do if you run a startup? 

First, don't panic or make any rash decisions.  If you are still in pre-revenue development stage, the recession may not affect you much, since you aren't yet selling your product or service. 

If you are in ramp up, your response may depend directly on your financial resources.  Those companies with extensive resources may wish to continue at full speed ramp in order to grab more market share during the downturn.  However, those companies with limited resources may need to make tougher choices.

Those tough choices can include laying off the poorest performers or non-essential hires and/or consultants.  Cutting other costs wherever possible without cutting out muscle may also be necessary.

Although there is no way to predict the length and severity of a recession, recent history - the last 20 years - has shown that recessions are shorter and less severe than before, primarily due to faster acting monetary and fiscal policies that minimize disruption.

The key takeaway is to not overreact and cause more disruption to your fledgling business than is warranted.

Don Jones



Don Jones
CEO, VentureDeal

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