“Everyone has a plan ‘til they get punched in the mouth.” -Mike Tyson

I admit, I’m not a big fan of Mike Tyson, but when a statement rings true it’s time to listen.
In the past we’ve had lots of “feather weight” economic upheaval. There have been “light weight” and “middle weight” financial bouts; but in 2010 we are in the “heavy weight” division. In the heavy weight world you feel every punch.
When the business world entered the ring for this fight we had no idea it would last this many rounds. The initial hits we took could be expected and we made changes as needed. Now, as the rounds pile up and months turn into years everyone is digging deep just to stay alive.
These days clients and customers are reevaluating necessities, contracts, business relationships and employees— but that means opportunity, not dead ends. This is not a Pollyanna point of view, it is real. All those potential clients who have been sitting on status quo year after year now have a reason to open up to change.
Making changes when sales are flat can be scary. “If the change doesn’t work how big of a financial hit can we take?” Flat sales mean you are taking hits left and right. The cancelled order is a right jab. A top customer who went out of business is a left upper cut. Your top sales rep that goes to work for your competitor equals a straight right followed by a left hook.
After three years in a tough economy you’re bruised and bleeding. Here are some coaching tips:

1.  Move your feet. Are your employee’s running fast but getting nowhere? You may want to take a look at their feet. They could be shackled to an archaic system. “We re-did our ops manual last year.” Who re-did it? If it was constructed by management and signed off by operations, you might need to give it another shot.
Employee Training: Gather information from everyone. Where is the shortfall in operational procedures? Change people around and open up your cross-training to help employees feel both wanted and needed. Cross-training also allows you to hire from within and reduces ramp-up time with the bonus of employee satisfaction. Also, putting a supervisor on the front line can be a great inspiration generator.
Sales and Sales Training: Throw out the statistics. The idea that x number of calls equals so many appointments which equals so many sales will not work today like it did in 2007. Don’t blame your sales teams for not making sales; you’re the one that is holding them to the defunct sales standard. Deconstruct the sales process and ask your sales reps to put it back together. Give a prize for the most outlandish workable idea.

2.  Cut your eye. Blow after blow your face has taken a beating; we need to cut some flesh so you can see. It is time you looked at your company from the outside in. This is not as easy as it sounds. Some of the things you invested time and money into may need reworking or elimination. Areas to consider include:
Marketing: Down markets are a great time to take over market share. Have you cut back to conserve resources? When you stand on the outside can you even see a path looking into your company? Make your marketing dollars prove they are working for you. Wherever you spend money ask for a detailed report and electronic surveillance if possible. If there is no data available, even if you think it is working for you, if you are spending money, you should delete it. Times are tight, don‘t spend money on hope.
Website: “In our line of work no one really looks at our website.” What does your website look like? The majority of websites out there have a business that spent money on it but did not invest in it. When a website holds no value for today’s buyer, they won’t go to it, but it has nothing to do with “your line of work.”

3. Learn. “I’m scared every time I go into the ring, but it’s how you handle it. What you have to do is plant your feet, bite down on your mouthpiece and say, ‘Let’s go.’“ – Mike Tyson.
It is easy for business owners and management to get frustrated when you can’t seem to land a single punch. Your company is bobbing and weaving their hearts out but you just don’t seem to be gaining any edge.
Listen and learn from the guys with the championship belts. Call your clients who are holding their own or even prospering and ask for input. When you are in the fight you don’t see the whole picture. Get a new, different perspective from your usual sources. It’s easy to commiserate with a buddy and play the victim card but if that is your desire then throw in the towel now so you don’t have to take another hit. If you want to win; if you really, really want to win, now is the time to dig deep.

“A champion shows who he is by what he does when he’s tested. When a person gets up and says ‘I can still do it’, he’s a champion.” -Evander Holyfield
By: Shari Allison

I see no great changes on the economic horizon coming our way.  What we have been experiencing the past six months will continue, at least for the near future.
The federal government has been very successful at keeping mortgage costs at record low rates.  I believe it would be in everyone’s best interest if the low rates were to continue into the next year or two.  The cost of maintaining the low rates will be considerable to taxpayers, as the government has been purchasing the mortgages as they are created to avoid a potential increase in rates, due to a shortage of mortgage buyers in the private sector.  For the near future, I expect that interest rates will continue to be at all-time lows with minimal changes.
Foreclosures are expected to continue at a steady rate for the next two years.  The peak in the number of new mortgages created was in 2007, and many of those mortgages were written with three to five year terms, with contracts calling for a rollover to adjustable rates at the end of the term. It will be difficult for residential real estate values to reach a consistent and predictable level until the foreclosures have left the market place.
I expect the volatility in the stock market to continue with no end in sight.  There are so many entities using computer programs to buy and sell securities that volatility is pre-programed into the current system.    If you are someone who likes to follow the value of stocks on a regular basis, you will feel like you are riding a roller coaster.
If you are considering the purchase of gold as a hedge against inflation and a safe place to put your money I recommend using caution. I have seen information that suggests that gold certificates are being sold to the public and the gold is not being purchased to support the certificate.
An interesting observation I have made during this difficult economic time is the number of people with significant amounts of cash to spend.  Real estate is changing hands without the benefit of financing, and property is selling in a matter of days or weeks if it is priced at today’s market values.  I have been involved in the real estate and financial services business since the early 1970s, and I have never seen such diversity in the market place.  Though there are many people losing their property to foreclosure, there are also many people willing to pay cash for real estate.
These are stirring times for those of us making our living operating a small business.  Going back to the basic principles of successful business operation, and then holding fast to those business principles on a daily basis, seems to be the only logical avenue to follow in order to both survive the difficult times we are faced with, and to be in a position to prosper when the economy begins to move forward again.
By: Jack Van Rossum

There is some very good news coming from Washington regarding the banking industry. The Obama Administration has suggested that the Glass-Steagall Act, or at least some parts of the act, need to be reinstated. I believe it would be good for our country to once again limit the powers of the banking industry. As much as I hope to see this happen, it will be difficult for the current administration to accomplish this because of the power of the banking industry.

On the local front, housing prices in certain areas are on the increase. San Francisco home prices have increased each month for the past seven months. This is a very positive indication that our overall economy is beginning to improve. On a national level, home prices have been flat, which is a huge improvement over the steady decline we have been experiencing for oh so many months.

The Federal Reserve System is holding the federal funds interest rate in the range of zero to one-quarter of 1 percent. At the same time, the mortgage rates on home loans are being held artificially low because the Federal Reserve is in the process of purchasing $1.25 trillion dollars in agency mortgage-backed securities.

If you are feeling like you are not making much progress in the return you have been earning on your stock investments, you are right. The 2000’s have been the “lost decade” for the stock market. This is the first decade since the great depression of the 1930’s that the stock market has not gained value from one decade to the next.

In difficult times like we are now experiencing, people look for a secure place to put their money and a great deal of money has moved into bonds and the bond market. If interest rates begin to move up it will have a very negative impact on the bond market. I have heard the comment made, “we have a bond bubble.”

The most positive movement I see locally is the intensity of the residential real estate market in the entry-level price ranges. It is not difficult to find properties selling in less than 30 days, and many properties are selling in less than a week or two. In my view, this activity is a clear indication that people have money to spend if they think there is value in what they can purchase. It also means that people are beginning to have more confidence in our local economy. As people gain confidence they will once again be willing to spend money.

If you would like to have a detailed account of where our government has been since September of 2008, and in particular what took place at the Federal Reserve, get a copy of, “IN FED WE TRUST,” by David Wessel.

Jack Van Rossum C.C.I.M. is an independent real estate broker in Chico. He can be reached at 530-342-6915 or at jrossum@sbcglobal.net.

By Jack Van Rossum

With all of the negative information flowing from the mainstream media, I find that it is often refreshing to take a few minutes to look at the positive side of current conditions. Anyone in business in the North Valley is struggling with how to improve the income of his/her business. Information is valuable, but you must know how to use it, or it is simply information. In the information world we live in today, it is not simply a matter of how to get more information, but rather how to filter through the mass of information we receive—and then make some sort of positive use of that information—that ultimately affects a businesss’ bottom line.

The stock market is improving and has increased in value in the range of 60 percent from the market low in March of this year. This is a major increase in the overall value of the market. The upswing is important for two reasons. First and foremost, it is an indication that people have increasing faith in the economy, and they are willing to invest again. The second reason I think it is important for those of us in business in the North Valley is that it means people who are on the brink of retirement can begin to think about selling their homes and moving north.

Many people with 401k funds are reluctant to retire and roll over their assets in a down market.  The improvement in the value of securities will help people move forward into retirement. As more people choose to retire, we in the North Valley will experience an influx of new residents.  These new residents have a very attractive profile to those of us in the business community.  Newly retired families who move to our area often bring with them their own income stream and sufficient assets to pay cash for a new residence. They also are in a financial position to make major purchases to accommodate their new leisure lifestyle. They do not have children to crowd the school system. They provide a broad economic base for the local medical community. In short, they bring a permanent boost to the local economy that benefits local businesses.

People retiring from the metropolitan areas of our state move north to seek a better quality of life, and many view the North Valley as providing that enhanced quality of life. When you are thinking of what to do with your business to improve your profitability, keep in mind that every third person in our country is between the age of 43 and 63. That means that the baby boomers are all headed directly into retirement, and they represent one-third of our population. I believe the baby boomers are going to change the way we look at the economy.

There is an excellent report available as a free download from The Great Valley Center in Modesto. Go to greatvalley.org and look under publications for: Assessing the Region by Indicators: The Economy, third edition. This report provides an easy-to-read and understand summary of economic indicators in our region—North Sacramento Valley, Butte, Colusa, Glenn, Shasta and Tehama counties.

Jack Van Rossum C.C.I.M. is an independent real estate broker in Chico. He can be reached at 530-342-6915 or at jrossum@sbcglobal.net.

By Jack Van Rossum

Social Security is a lot like the ozone layer—we all know it’s there now and we count on it being there in the future. Yet most people don’t know much more about it than that. Here’s a short list of interesting facts about Social Security.

1)    Social Security benefits do not automatically start coming in the mail the first day of normal retirement age. They must be applied for. The easiest way is to set up an appointment with the local Social Security office or call 1-800-772-1213.

2)    To get an official statement of all the earnings recorded in your Social Security account, an estimate of your current disability and death benefits and an estimate of future retirement benefits, fill out Form #7004 Request for Social Security Statement, obtainable at your local office.

3)    If you do not find and correct errors in your Social Security record within three years, they become part of your permanent record. Therefore, you might want to check on them every three years or so.

4)    You can work during retirement, but if you earn too much it will reduce the size of the benefits you are receiving from age 62 up to your normal retirement age. The limits on such earnings are currently $14,160 for 2009. Benefits are reduced by $1 for every $2 that you earn over this amount. After you attain your normal retirement age, you may work as much as you want with no reduction in benefits, although they may become taxable if you earn too much.

5)    You can increase the size of your retirement benefit by delaying collecting your benefits and by remaining on the job past full retirement age. This higher benefit comes from extra earnings toward your account and a credit awarded for this patience, ranging from 3 percent to 8 percent of your benefit depending on your date of birth.

6)    For people born after 1937, normal retirement age will increase. For example, if you were born in 1940, full retirement age is 65 and 6 months; born in 1950, it is 66. Anybody born in 1960 or later will be eligible at age 67.

7)    Social Security disability benefits do not continue past normal retirement age. The month before you attain normal retirement age the disability benefits are automatically converted to retirement benefits.

8)    There is a limit to the amount of benefits that can be paid on each Social Security record called the Maximum Family Benefit, generally around 150 to 180 percent of the worker’s benefit. If this limit is exceeded, the family benefits are reduced.

9)    Ex-spouses, widows and divorced widows may all be eligible for benefits on a spouse’s record. Provided the requirements are met, they may even all be collecting on the same worker’s record.

10)    There are two Social Security trust funds: one used to finance retirement and survivor’s benefits and the other used to finance the disability program. Money not used to pay current benefits is invested only in U. S. Government Treasury bonds.

Social Security is a significant resource for many retired individuals. Spend some time with your financial planner learning about what part these benefits should play in your retirement planning future.

This material was prepared by Raymond James for use by Dan L. Bay of Raymond James Financial Services, Inc. Member FINRA/SIPC).

Dan L. Bay is a vice president with Tri Counties Bank and branch manager with Raymond James Financial Services located at 780 Mangrove Ave., Chico. Dan can be contacted at 530-898-0415 or toll free 1-866-822-4753. Tri Counties Bank Investment Services is a department of Tri Counties Bank. Securities and investment advisory services are offered exclusively through Raymond James Financial Services, Inc., Member FINRA/SIPC, an independent broker/dealer, and are: ●NOT FDIC insured ●NOT GUARANTEED by Tri Counties Bank or any other federal government agency. ●Subject to risk and may lose value.

By Dan L. Bay

Market Rebounds

Since World War II, there have been approximately 10 recessions, by the classic definition, in the United States. The recessions have lasted for as little as six months to as long as 16 months, and the severity of each recession is different. The classic definition of a recession is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters. Economists don’t all agree that this is a true definition of a recession. Instead, many economists will look at changes in the unemployment rate or consumer confidence as well as other metrics. The Business Cycle Dating Committee at the National Bureau of Economic Research (NBER) has given what might be the best definition of determining when a recession has taken place. They look at the level of business activity in the economy by looking at things like employment, industrial production, real income and wholesale-retail sales. Whatever definition one might choose to use, the stock market has usually started the decline before anyone knows there is a recession. Since the economic metrics used to determine a recession are backward looking, no one knows they are in a recession until it has already happened. Whereas the stock market tends to be forward looking, often making it a leading economic indicator letting investors know that there may be trouble ahead.
The S&P 500 has experienced five years in a row of positive performance through 2007, which follows three consecutive years of losses. Since the S&P 500 started measuring returns in 1926, it has experienced 23 down years (most recent in 2002) and 59 up years. Historically, some of the most dramatic market gains have followed market lows (most recently in 2003 coming off the market low) or coming out of a recession.
Even though a recession and a market correction are separate and independent events, the pattern of decline and recovery are similar. The returns after a recession and after a correction have exceeded the long-term market average by a wide margin. The question of long-term discipline becomes important because it becomes statistically improbable to time getting out of the market at the high point or getting in the market at the low point. Missing just a few choice days in the history of the market can make a huge difference in the returns realized by an investor.
The major difficulty is not the getting out, it is the timing of getting back in. This can be very harmful to your investments. If an investor were to miss the best 10 days in the market over the last 10 years, their average annualized return would have fallen from 6.57 percent to 1.58 percent. If they missed the 30 best days over the last 10 years, their average annualized return would have declined to -5.41 percent.
While no one can predict the bottom of the market, history shows us that the U.S. economy is resilient and rebounds take place quickly. Missing just a few of the leading rebound days can make a significant difference in the performance of a portfolio. The only way to be assured of capturing all the market upside is to remain fully invested, using a long-term investment plan with a portfolio diversified over several asset classes and investment styles.
Dan L Bay is a vice president with Tri Counties Bank and branch manager with Raymond James Financial Services located at 780 Mangrove Ave, Chico. In 2007, Dan was recognized as one of the top 50 bank financial advisors in the country by Bank Investment Consultant magazine. Dan has been a member of the Raymond James Advisory Counsel since 2002 and has been awarded to the Leaders Counsel in 2002, 2003, 2005, 2006 and 2007. Dan can be contacted at 530-898-0415 or toll free 1-866-822-4753. Tri Counties Bank Investment Services is a department of Tri Counties Bank. Securities and investment advisory services are offered exclusively through Raymond James Financial Services, Inc., Member FINRA/SIPC, an independent broker/dealer, and are: NOT FDIC insured, NOT GUARANTEED by Tri Counties Bank or any other federal government agency. Subject to risk and may lose value.
The above information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.

A Roth individual retirement account (IRA) is a personal savings plan that offers tax benefits to encourage retirement savings. You can contribute up to the less of $5,000 in 2009, or 100 percent of your taxable compensation into a Roth IRA. In addition, individuals age 50 or older can make an extra “catch-up” contribution of up to $1,000 in 2009. Contributions to a Roth IRA are not tax deductible, but the funds grow tax deferred and distributions are tax free under certain conditions.

Prerequisites

• You have taxable compensation (i.e., wages, self-employment income) during the year of the contribution.
• Your modified adjusted gross income (MAGI) for 2009 must be:

nest egg

1. $105,000 or less for a full contribution if your tax filing status is single or head of household (partial contribution allowed, up to a MAGI of $120,000)
2. $166,000 or less for a full contribution if your tax filing status is married filing jointly or qualifying widow(er) (partial contribution allowed, up to a MAGI of $176,000)
3.$10,000 or less for a partial contribution if your tax filing status is married filing separately and you lived with your spouse at any time during the year (full contribution not allowed)

Note: these income ranges are for the 2009 tax year and are indexed for inflation.

Had you considered making contributions to a Roth IRA in hopes of creating tax-free distribution upon retirement, only to discover that as a high-income earner you were not able to make contributions? If so the following is going to be of great interest to you!

There are two methods of funding a Roth IRA; contributions which are generally limited to $5,000 ($6,000 for 50 and older), or you can convert all or a portion of your traditional IRA to a Roth. Currently if you are married filing separately or your adjusted MAGI exceeds $100,000 you are not allowed to convert a traditional IRA to a Roth IRA.

What’s Changing?

In 2006 President Bush signed the Tax Increase Prevention and Reconciliation Act (TIPRA) into law. TIPRA goes into effect in 2010 and repeals the $100,000 income limit for conversion and also allows conversions for taxpayers who are married filing separately.

Why concern yourself with this now?
Even though the new rules don’t take effect until 2010, there are steps you can take now if you want to maximize the amount you can convert at that time. If you aren’t doing so already, you can simply start making the maximum annual contribution to a traditional IRA, and then convert the traditional IRA to a Roth in 2010. And don’t forget that SEP and SIMPLE IRA’s can also be converted to Roth IRAs. You should consider maximizing your contributions to these IRAs now and then converting them into Roth in 2010.

Don’t forget to consider the tax implications

If you have only nondeductible contributions to your traditional IRA, then only the earnings will be subject to tax at the time you convert the IRA to a Roth. But if you have made fully deductable contributions to your traditional IRA, the entire amount will be subject to tax when you convert to a Roth. You should consider the tax implications very carefully and consult your tax advisor prior to conversation.

Dan L Bay is a vice president with Tri Counties Bank and branch manager with Raymond James Financial Services located at 780 Mangrove Ave., Chico.
Dan can be contacted at 530-898-0415 or toll free 1-866-822-4753. Tri Counties Bank Investment services is a department of Tri Counties Bank. Securities are offered exclusively through Raymond James Financial Service, Inc. Member FINRA/SIPC, and independent broker/dealer, and are -NOT A DEPOSIT-NOT GUARANTEED by Tri Counties Bank-subject to risk and may lose value.
The above information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.
Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as financial advisor of RJFS we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

By Dan L. Bay

By Scott Camp

In almost any area of activity there’s a time when someone says, “We’ve got to get back to the basics if we’re going to make it.” This is said with a knowing, authoritative voice, and everyone else says, “Yes, that’s right!” as though some particularly intelligent thing had just been said. What usually happens is…
• People keep doing what they’ve been doing; only they do it with more vigor and energy
• Or…they do things they haven’t been doing (not all of which are the right things)—at least for a little while. Then they fall back into their normal behaviors.

So what are “The Basics” in business? Well, every business has its own. Retail is different from manufacturing, which is different from nonprofits, which is different from…well, you get the idea. Here are some universal “Basics”:

FIRST IMPRESSIONS ARE IMPORTANT!
• What does your parking lot look like?
• If you have windows, are they clean?
• Does your front door have peeling, sun-faded decals from every organization or credit card you work with?
• If you have a receptionist, make sure he/she is well groomed, well dressed and knows how to greet people politely and quickly.
• Have you ever called your business on the phone and really listened to what the person answering the phone says?
• What about your reception area? Is it the storage area for your bottled water and extra supplies or other “stuff”?
• If there’s a help-yourself coffee or refreshment area, is it neat, orderly and complete?
• Is there a restroom available to customers? Does someone have the responsibility to check it regularly throughout the day?

WHAT ABOUT YOUR COMPETITORS?
• You should be “shopping” your competitors regularly—at least once a quarter.
• If you have salespeople, have them do the shopping. You should do it at least once a year yourself. Sometimes you can do this over the phone. Other times you may have to visit their location.
• What is it you want to know when you shop them?
o How do their prices compare to yours on similar products?
o Will they negotiate prices if pushed?
o How quickly can they deliver?
o What do they say about you, and other competitors, when you tell their salesperson you’re going to look around at XYZ?
o Can you learn anything from them that they are doing better than you are?

MARKETING IS AN INVESTMENT, NOT AN EXPENSE.
• It is easier to get more revenue from people with whom you’re already doing business than it is to go out and get new business.
o Do you have a current customer list in a usable database? If not, why not?
o If so, how often do you “attack” it with new messages, new products, reduced prices, incentives to come in, rewards for shopping with you or for recommending friends of theirs who could be customers?
• Do you have ways to measure the effectiveness of the marketing you do?
o When a media rep wants your business, tell them to figure out how you can measure the effectiveness of what they’re offering, and if they can’t do that, find something else that can be measured.
o Once you know what’s working, take money away from what isn’t and increase your investment in what is.
o When media reps offer big discounts for long-term advertising commitments, give them an alternative proposal…“ I won’t make a long-term commitment, but if what I do works and I keep renewing my ads with you, then I want a retroactive discount when my total investment reaches what the long-term commitment would have been.” If they won’t do that, find another medium.

People may say, “This is all old stuff. There’s nothing new here!”

EXACTIMUNDO…That’s why it’s called getting “Back to the Basics.” The “Basics” are called the “Basics” for a reason.

Scott Camp consults with the Redding Chamber of Commerce on marketing and political issues and has a private business consulting practice. He has more than 25 years experience in retail, manufacturing and advertising. He can be reached at 530-736-1181 or e-mail to: scott.camp@sbcglobal.net.

By Kayla Cook

In December it was predicted that Shasta Community College would be facing a $2 million shortfall in state funding, but on March 11 they found that no cuts would have to be made—at least for now.

The school found that state budget cuts weren’t nearly as deep as anticipated, and that they would be able to rely on reserves and revenue from additional enrollments.

“We’re hoping that with our increased enrollment and hopefully the continued support of the Governor and the state legislator that the community college system will be able to continue operating and providing learning opportunities for all the transfer students and career technical students,” said Gary Lewis, president of Shasta College.

The college farm, fire hall and heavy equipment program were among the list of programs to be cut. The list of potential cuts was released Jan. 23, and the college was met with a large response from community members.

There were many letters written and e-mails sent in support of the programs, Lewis said. There was even input given that helped provide solutions to a few of the school’s issues.

School administrators are still closely watching some of the programs on the list. They are evaluating the operation of the fire hall and options in terms of food service. The farm has also become a moving target due to the water shortage, and although they have decided to continue the program, they will now have to look at ways to utilize much more water than they did in the past.

In the next few months the college is going to be looking at different ways to be resourceful and help preserve the programs, Lewis said.

They will also be analyzing why the student drop-out rate is increasing. The programs start out with a good number of students and by the second semester that number has dwindled a great deal.

Another issue could arise because of the tremendous growth the community college system is seeing. There is an increase in the number of students that are going to community colleges as opposed to CSU, Chico or a UC. At the moment this is positive for the school, but that looks as if it is soon to change.

“The state is decreasing our funding and we have increased enrollment, so community colleges are facing some unfunded enrollment growth, which means we’re teaching students and not getting paid for it,” he said.

Shasta College employees are working to find innovative ways to provide learning opportunities for students and at the same time reduce costs.

“We’re trying to do everything we possibly can to deal with the budget crisis and not let it have a direct effect on student learning,” Lewis said. “We’re trying to tighten the belt as much as we possibly can.”

By Keith McElroy
Are we in the middle of an accident caused by human error, or are we in a catastrophe that was an inevitable shift? The influence of the Internet and related technologies over the last 20 years points our attention to a shift in the economy. Other factors catalyzed the shift. Baby boomers staging for retirement with lots of money to invest is a factor. The changes in China’s economy and of course 9/11. A crumbling of some things that we have taken for granted can be interpreted as a reminder that changing focus to survive may lead to opportunity.
I recall, years ago, watching a business owner save his company from a major financial loss by bringing his employees together and explaining the economic realities while also providing assurance that he had a plan to survive and would do all in his power to retain jobs. The following six months were dramatic in that margins more than doubled and the deficit loss was followed by exceeding performance beyond what would have happened if the loss had not occurred. His bold leadership paid off.

Opportunities to thrive?

Retail and business spending has a cause-effect aspect that opens doors to observant entrepreneurs. Dramatic reduction in traditional workforce positions leaves under-serviced markets. Corporations will contract out work to smaller, capable companies that understand the critical needs. Consumers will be on the search for ways to improve their quality of life on a frugal budget. For example, the reduction of car purchases will breed new needs for faster, cheaper and easier ways to extend the lives of our aging cars as well as better ways to get around. The movement of baby boomers through the aging process with better health than their ancestors (but diminishing income) will create demand for bridge housing that provides the ease of life of a retirement facility with the youthful independence of a time share. Less driving means we will want to be closer to shopping, dining and mass transit and we will seek to invest less time trying to find what we need.
Consider repositioning yourself or your organization as a facilitator of problem solving amidst the disaster. Learning from the lesson of US Air 1549, imminent danger is followed by heroic leadership, followed by success, followed by jubilation and reflection on the value of pulling together and the seasoned experience of a veteran pilot who responded to the need.

Tools to grow by

Applying technology to the opportunities before you can be a smoother path than you might imagine. Take, for example, these ideas that can accelerate the breeding of a new idea:

1. Use a monthly Intranet service to keep track of your projects and your growing client list. See www.37signals.com and www.salesforce.com. Cost $10 per month and up

2. Rent “by the month” Call Center and automated response. See www.angel.com. Cost $100 per month and up.

3. Develop an informational Web site about your industry. Cost $15 per month and up.

4. Reach out more proactively to existing and new clients with a focus on innovation and problem-solving. See www.constantcontact.com. Cost $20 per month and up.

5. Upgrade the accounting software. Quick Books online provides access anywhere which is handy when you are working hard on a shoe string. See www.quickbooksonline.com. Cost $50 per month and up.

The economic shift is real and the road is difficult. Consider making a migration toward the new global business landscape with technology that does not stretch your budget and increases your value to those you serve.

Keith McElroy is an independent software consultant specializing in development of software for a broad range of businesses and government agencies. Keith may be reached by e-mail at keith@mcelroy-tech.com or by phone at 530-591-3052.