Although many people may automatically think of the Great Depression when they hear the term "recession," the two terms are completely different. Whereas an economic depression is quite rare, recession is a natural part of the business cycle. Furthermore, the U.S. government is much better equipped to help with depression today than during the era of the Great Depression.

Due to the fluctuating nature of the economy, it is important for business owners to maintain a "business as usual" mentality. History provides valuable depression information that today's companies can now use to their benefit. For example, during the Great Depression, advice now proven ineffective was regularly followed. As a result, companies made many unwise decisions, including the following:

1. Cutting back on their marketing and advertising

2. Unnecessarily firing employees

3. Neglecting customer service

Action Steps
The best contacts and resources to help you get it done

Develop more aggressive marketing campaigns before a depression

Consumers are more wary of costs during a recession, which means businesses need to give current customers a reason to stay with them and new customers a reason to come to them.

I recommend: Use incentives such as discounts or free offers as a way to attract attention to your business. Check out Forbes.com for a list of innovative marketing ideas that are both effective and affordable. Also, consider implementing a customer loyalty program. Research suggests that loyalty programs are an effective way to maintain a strong customer base as well as attract new clients. Repeat Rewards can help you develop a customer loyalty program that suits your business's needs as well as its budget.

Think carefully before reducing headcount on depression information

Contrary to popular belief, a recession is actually a great time for companies to hire more employees. First, more people typically look for a job during this time, which means businesses can choose from a larger pool of candidates. Additionally, during a recession or economic depression, training new staff tends to be less distracting. Layoffs, on the other hand, increase the nation's unemployment rate and have a direct impact on the overall economy.

I recommend: Before you increase or decrease headcount, discuss your situation with an experienced business consultant. Global Business Consulting will analyze your needs and provide professional insight regarding your company's situation. This type of advice can save you money and prevent a huge amount of layoffs. Consider using a staffing agency such as Spherion to recruit new employees. Temporary workers are an affordable way to gain additional workers and they also help improve employee morale. When your current staff sees that the company continues to hire people even during an economic decline, they will be less likely to search elsewhere for employment.

Provide exceptional customer service regardless of a depression

When times are tough, companies tend to forget how important their customers are to them. At the same time, however, those customers are on the lookout for better deals and are therefore more likely to contact a competitor if your company's customer service is lacking.

I recommend: Conduct a customer satisfaction survey to see how your support team measures up. Such an evaluation will offer insight into which areas need improvement and it's also quite affordable. Checkbox.com creates specialized customer satisfaction surveys for business of all sizes. This is also a great time to evaluate policies such as shipping, payment methods and product selection. Leap Technologies analyzes such procedures and offers insight on how to improve customer experience.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Don't spend what you can't afford. Many businesses rely on credit during periods of financial instability. While this may provide temporary relief, remember that excessive credit use increases your debt.
• •  Although an economic depression is highly unlikely, you should always be prepared for the worst-case scenario. Consider visiting a depression consultant to learn your options.