I believe that the answer for small and also to bigger businesses is:
1) Increase their Market Orientation skills
2) Review their Costs Structure
1)Increase their Market Orientation skills
Many businesses fail to acknowledge of where the market is heading, and also don’t realize that economy is not frozen in time, and the value bubbles through the Production->Market Chain are constantly changing result of macro and micro factors.
So, before investing, Managers should analyze better if their expectations meets the market trend.
2) Review their Costs Structure
Considering two types of costs:
Variable costs – Which increase or decrease, according to the increase or decrease of business volume (or in another word, of “sales”)
Fixed costs – Which remain the same, even if the business volume decrease.
Companies usually increase their fixed costs, when the “economic weather” is good, and forget that all economies evolve in cycles, and economic storms will happen.
Like Romans use to say, “In time of peace, we prepare for war”, in economics, the sentence is also applied as “in time of good economic periods, we should prepare for harsh economic periods.”
So, all businesses should invest more in solutions (human, technological, infrastructure) that will allow accomplishing two goals:
a) Increase their performance and efficiency.
b) Decrease the weight of fixed costs, on the company cost structure. By doing that, companies will perform better with “good economic weather” and will cruise through “economic storms”.
