10 Steps to Ready Your Biz for an Turnaround

Experts predict the economy will remain in the tank through 2009, and maybe even in 2010. But small business owners can take this opportunity to lay the groundwork for when things do start to pick up.

Be the first to get out of the starting gates with these 10 steps:

1. Assess Your Business

Examine your company's core mission and capabilities so you can draft a plan. Strategic business consultant Lea Strickland recommends plotting out several different scenarios for when the lights go back on. Which people will you need to put back in place? What offices will need you need to scale back up? "They have to think it all through, what they are saying and doing to make it work," says Strickland. "They have to do it logically and incrementally."

John Combs, chair and CEO of communications solutions company ShoreTel (SHOR Quote), agrees, adding, "Be wary of silver bullets -- things that look easy to do and are outside of what you've been successful at. That means reengineering yourself in this time. In a difficult economy, you're going to have to watch resources to keep your company."

2. Be Strategic

During this assessment, keep in mind what you can't do so as not to cut into your ability to compete. That means considering upgrading your Web site, training to retain employees and investing in new technology. If you can afford it, hire, since a lot of top talent is now available.

It may also mean taking a closer look at your customers. Many consumers don't have a lot of discretionary income these days. Look at where they're spending money and see if your business can meet those needs, says Marvin Davis, author of "Take No Prisoners: A No-Holds-Barred Approach to Corporate Excellence." Figure out how you can entice them to come in or hire you.

3. Be Contrarian

The biggest mistake is to cut prices, says Davis. "You launch yourself into a death spiral," he says. "You may be selling more but your profitability goes away." Instead, see if your product or service serves a particular niche. If so, you may actually be able to increase prices....