When speaking with distributors or suppliers over the past few months, I eventually get around to asking the question, “How’s business?” Despite all of the doom and gloom we’ve been reading about in the newspaper and watching on cable TV news networks, most people in our industry are saying business is relatively strong. Still, they’re concerned that the prolonged housing slump, the subprime mortgage meltdown and the high cost of fuel are causing consumers to pull back on their spending, which will have a ripple effect on the economy as a whole.

Those concerns will cause some of them to hunker down, cut back on services, lay off employees, close branches or — in extreme cases — even go out of business. Before making any drastic moves, I’d recommend that you read the article “Turning Urgency into Action” by Steve Deist of the Indian River Consulting Group. One of the points he makes is to pay close attention to what your competitors are doing. Are they reducing inventory, firing sales reps, closing branches? If so, instead of matching their moves to maintain an even playing field, it might make more sense to pour your resources into locations that your competitors are abandoning.

In another article posted on our Web site, “The Upside to the Downturn”), David Giannetto writes that great companies expand during slowdowns, they don’t pull back. He says all competitors within an industry deal with the same challenges. You want to be there to snatch up the customers of failed competitors. Be prepared to increase your sales, marketing, and advertising efforts during the slowdown to make sure that newly available customers reach out to you first.

As Deist writes, recessions are not fun. No one enjoys making painful decisions. But they also provide smart managers with an opportunity to think strategically and see opportunities instead of just misery.

This editorial appeared in the May/June 2008 issue of Progressive Distributor. Copyright 2008.