Just about every one is well aquatinted with the words “Financial Crisis,”  yet despite round the clock news coverage and endless punditry, many of the people I talk with don’t fully grasp how this all happened.

Here is a great guide I found over at Mint for those who still feel lost in the sea of economic jargon.  It’s not perfect… It over simplifies some factors and leaves others completely out but all in all this is a rather accurate and detailed account, laid out in an easy to digest chart…

How it all happened:

For the rest of the chart head over to Mint Blog…

The media is buzzing and everyone’s afraid to use the “R” word.  We could be facing an economic hiccup, or a much deeper problem.  That being said it’s a good idea to prepare for the worst… and make the best of it.   Hopefully we aren’t talking about  a recession but if that’s the case a recession can offer some new opportunities.

Refocus

When a company is experiencing rapid growth, it can find itself losing touch with it’s core values.  A contraction is a good opportunity to re-evaluate and re-focus on what your core mission is and what your core competencies are.  Whether this brings you back to product development or customer service, focusing on the quality of your product or service is important step in retaining customers, and winning a small and competitive market share.  Ultimately these efforts will help you through tough times and better prepare you for good times.

Streamline

It’s time to cut the fat and look for processes and platforms that empower  you to do more with less.  Streamlining can be done on many different levels from small day-to-day items like interoffice communications, to big picture issues like lead generation and sales.  Technology solutions, and organizational changes can help your people better use of the resources they already have.  Outsourcing  can also increase efficiency by allowing you to do what you do best, while having someone else do what they do best, for you.  Leveraging new technologies and partnerships will help you through through times and pay big dividends when you re-enter a growth phase.

Retool

Deploying new technologies can be costly, but you’ll likely find much more competitive pricing during an economic slowdown.  If you have cash on hand or available credit, this could be an excellent opportunity to take advantage of a buyers market.  You may find that the savings you are able to get reflected in your bottom line for years to come.

Hire

It’s not just a buyers market, it’s a hirer’s market.  When the country is in recession the job market gets very competitive.  This is obviously because businesses can’t afford to hire in tough times, however, if you can, you are going to have a lot of eager applicants with mortgages and school loans that need to be paid.

Connect

In many cases, your existing customers are your best customers, but in the race to gain new customers,  your current ones can sometimes be neglected.  Reconnecting with these customers and understanding where they are and where they are going is vital.  Chances are if you are suffering, they are suffering too, and that is an opportunity.  Helping your customers through tough times, through discounts, better terms, or even just listening, will help turn them from an account to an annuity.

All these things are important all the time, yet they are often neglected.  Now obviously not every business will be positioned to take advantage of these opportunities, but the underlying idea is still holds true. Crises force us to stop and take a critical look at our situation, and while some may lie down in despair the true innovators will turn the crisis into an opportunity.