There’s an old proverb about perseverance that says, “The darkest hour is just before dawn.” It might seem that way sometimes as small businesses work to survive this economic slowdown. You might feel like the malaise of the marketplace won’t end until it swallows your business like a pelican gulping down a fish.

Well relax, that’s not the way it is. Good times follow tough times — it’s inevitable. They call it the economic cycle, and it’s been around since people started measuring such things. It’s just as important for a business owner to plan for the coming boom as it was for them to prepare for the lingering recession. But when do you start? How do you know when the tough times are really over?

There are no clear, defining lines from recession to boom. It isn’t like throwing on a light switch in a room. It’s more of a slow, gradual dawn lighting up the eastern sky, taking its time to arrive. We want to find trends, not sudden eruptions from good to bad … we want to go from bad to just a little less bad.

THIS TIME IT’S DIFFERENT

Recently, you might have heard a business media talking head say, “It’s different this time.” Sure it is, and “the check’s in the mail” and “you’re my one and only.” Don’t believe what you hear from the economic pundits. Economics was invented to make astrology look good.

In the late 1950s and early ‘60s we had an economic boom partly based on new technologies like transistors. The “nifty fifty” stocks reigned supreme and surely it was different this time. Then along came the early 1970s and the Arab oil embargo. We were going to run out of oil in eight years, they said … it was different this time. Then we had the inflation and high interest rates of the late 1980s, stock market crash of 1987, the 1990s Internet boom, technology meltdown of 2000 followed by 9/11 and now the sub-prime crisis.

Every downturn was followed by an economic boom and vice versa. It’s never “different this time” and this is no exception. So let’s start planning for the inevitable resurgence of economic growth with two questions:

1. Are we at the bottom?

2. What business steps should we take if we are entering a recovery period?

Are we at the bottom? To answer that question, we must first realize that it’s a regional game more than a national one. Las Vegas may be in a boom while New York is in recession. So to figure out if we’re in a less-bad period (no one can find the actual, exact bottom), look locally for the signs:

• A surge in residential home sales, or at least a drop in the length of time homes stay on the market. Best bet: Speak to local Realtors.

• Increase in new construction means builders are experiencing a demand that will have a ripple effect on the local economy (think appliances, local building materials outlets, etc.)

• Decrease in vacant commercial properties and increase in commercial construction.

• Easier credit from local banks.

• Lower interest rates for mortgages and consumer credit.

• Decrease in local unemployment.

• Increase in “help wanted” ads.

WORK THE BOOM

All these signs, and more, indicate improving economic conditions locally, in your home territory of business, which is what matters most to you. Once you see these positive signs, it’s time to analyze your business for the right course to take. Here are a few tips to adjust your business plan emerging from a slow economy and gearing up for a boom:

Examine how your business did previously in times like these. You should be using a computerized accounting system. Quickbooks is the premier one right now. If you’re using an old paper system and doing your own bookkeeping, your first task is to change immediately.

If you’re in a new business, this will not apply, but if you’ve been in business awhile, you can make this accounting comparison. Go to the report section of Quickbooks (or the equivalent section if you use a different system). Examine two sections for a similar period of time:

• Sales by item summary. This will tell you what services or products were most in demand from your business during the last economic recovery period. Similar patterns will emerge this time around.

• Income by customer summary. Who’s buying your services during a recovery? Is it mainly commercial grease trap customers or homeowners who put off septic system problems? Are you serving young people buying their first home or older blue-collar folks, or professionals who need to expand or update their systems? This is crucial so you can target your marketing toward those customers.

THE NEXT STEPS

Now apply the particular and unique aspect of your business to this information. Factor in changes to your market since the last boom time:

• Has technology changed? There’s a good analogy in consumer electronics: Don’t stock up on VCRs when DVDs are the rage. The pace of technological change can be daunting sometimes. Do you carry the latest and greatest onsite system maintenance products? Be sure you’re not caught using outdated technology in booming times.

• Have the demographics of your market changed? Are municipal sewer lines stretching more heavily into your territory, taking your traditional customer base away? At the same time, is commercial development on the rise in your area, creating new markets for you to serve with your vacuum truck? Pay attention to these market changes, as they will require different sales strategies, pricing, equipment and employee training.

• What’s the competition like now? At the risk of sounding ghoulish, look around for competing business that didn’t survive the recession. Move aggressively to grab the market shares of moribund competitors. Likewise, be aware of aggressive competition and match these companies blow-for-blow.

• What are the factors unique to your industry? Some industries thrive in recession and don’t do as well in recoveries. Look to the unique aspects of your industry.

• Loosen the purse strings. Now’s the time to increase advertising and marketing, add to inventories, hire people. Be cautious, but move forward.

A FINAL WORD

So there you have it, the basic steps to take advantage of the coming economic expansion. And remember, when things are looking super good and it seems like this boom will never end … that will be the time to prepare for the next recession.