The conversation is worth having. Companies that make the right moves before and during a slowdown can weather even severe storms, and economic storms—like hurricanes—give warning before they hit. “Economic downturns are slow in coming, so you should have some insight, barring something drastic like 9/11,” says Michael Barnett, an assistant professor at USF’S College of Business Administration in Tampa.

Barnett recommends freezing hiring, which he says is “easier than laying off people.” He also advises businesses to remain flexible. “If you’re in a situation where your existing markets are drying up, innovate and get into some new areas that are not affected the same way or that are even growing,” he says. “If you have the resources, you can take advantage of downturns.”

If you aren’t really in a position to diversify but think your market will start growing again, sometimes staying the course is the best alternative if you can afford it. Barnett points to Southwest Airlines, which managed to maintain staff levels following 9/11 rather than laying off a lot of employees. “That created less turbulence and fewer problems [for Southwest] when the market turned,” he says. “If you can float through the storm, even though it costs money, doing so might put you in a stronger position to recover from it.”

We asked the leaders of five longtime local businesses—which together have a combined 235 years of business experience—what they’re doing to stay alive right now.

DEALING WITH A DOWNTURN
Five tips for staying alive.

1. A buck in the hand is worth two in accounts receivable. Manage your cash flow. If you’re in a downturn, don’t rely on promises. Step up your collection efforts.

2. Employees are the firm. The term “human resources” is misleading. Humans are not just another resource to be reduced during a downturn. Employees should be the last to go. If you keep employees in tough times, you earn human capital, which can help you survive the downturn.

3. Out with the new and in with the old. Don’t swing for the fences with risky new ideas. Go for the base hits, the classics. Beef up your core instead of jumping into something unproven. It’s not the time to take huge risks.

4. Die to live another day. Failure is painful but sometimes you have to pull the plug. Businesses die all the time. Remember, it’s only a company, so don’t get too sentimental. You can always start a new one. You want to get out while you still have the opportunity to do something else.

5. There is a “U” in Team Up. Seek a partner, but choose wisely. Your partner could be a source of cash or talent. You don’t want to go in too hastily, though. Do the due diligence. Make sure you can work together. Don’t give too much control or you could suffer an agonizing partnership.

Living Walls
Living Walls opened in 1970 on St. Armands Circle, then Sarasota’s main shopping area. Over the years the Circle became more tourist-focused, and the furniture and design store made the move to downtown Sarasota in 1986. Today it occupies about 5,000 square feet on lower Main Street and employs eight people. Owner Alison Levin Bishop, daughter of the shop’s founders, had considered an expansion during the real estate boom but opted against it. And, boy, is she glad. “It would have been a very difficult situation for me right now if I had done so,” she says.

Strategies for 2008
Be smart about your expenses. “You can’t always do something about your sales or revenues, so that leaves the cost end,” Bishop says. “Use every strategy you can and get everybody on board. Every expense counts. I’ve seen business cycles before; this isn’t the first time there have been highs and lows in Sarasota or the economy. When you anticipate that kind of tightening, watch your overhead.”