Although I’m not an expert in the stock market, I have heard the experts say in a down market you’re concern is not that you are making money but how to preserve capital.  Making money is the goal of any investor.  In a down market like we are facing now the most important thing you can do is preserve your capital.  When the excess is absorbed in the economy and the economy starts to heat up, you got your capital to invest.  You’ll make money for two reasons:  1) You won’t be working yourself out of a deficit position; 2) You’ll have cash resources to buy bargains. 

Your business should follow the same principle. 

Everywhere you look people are going out of business or reducing staff and even cutting locations.  Starbucks closing 600 stores and laying off 1000 people at headquarters.  Sharper Image in bankruptcy.  Linen ‘n’ Things in bankruptcy.  GM reporting almost unbelievable losses. 

This is not the time for CEOs, presidents and business owners to panic.  This is the time to examine every aspect of your business. 

Make the necessary cuts in budget, locations and even staffing, if necessary.  Don’t wait until you’ve gone through all of your resources, or your credit line is up to the max and it puts you in a position where you can’t pay your bills. 

This is the time to take action. 

Bring your business expenses and staff in line with the business you are doing.  There are two exceptions to this: 1) Never lay off the key person who has been productive for you and you will need in the future.  That person is worth investing in.  2) Never ever, ever, ever, ever cut the sales force or the marketing.  Improve the sales force.  Examine the goals.  Replace weak people with strong people.  Sales and marketing are the lifeblood of the company.  Expect more from everyone in sales and marketing.  Expect them to make extra effort.  Except no excuses.  But do not reduce your sales effort. 

Take action now.  So you don’t have to feel the pain later.