Everyday brings more news of problems in the economy, and we’ve all been touched by this in someway. In the Winter issue of The Professional Quilter, financial writer David Nagle, wrote an article about surviving, and even thriving, in a down economy. Here’s an excerpt from his article.

Late last year our government officials and most economists concluded something we have known for some while – that our economy is in recession, and it appears to be headed for a prolonged period of contraction. Some of your businesses may be challenged in some way by the economic downturn. It’s important to maintain your composure, stay positive and focus on what is important to your business. While it is important for you to stay realistic about the state of the economy as it may affect you, I suggest you try to tune out the doom, gloom and naysaying that pervades our TV, Internet and newspaper medias.

First, assess how you react when the economy negatively affects your business? Do you:

• Remain optimistic, disregard the impact, assume it will improve, stay the course?
• Heed the bad news, assume the worst, panic, shut down (jump out windows)?
• Try anything, aimlessly run in circles, not knowing what to do?
• Procrastinate, hide from the issues, hope they go away?
• Find a shrink or visit yours more frequently, read self-improvement books?
• Meditate, do yoga, chant, pray more, become more spiritual?
• Increase consumption of your favorite substances (alcohol, nicotine, pain killers)?
• Combinations of the above?

Just to let you know, the list comes directly from my own personal experiences in past economic recessions (1973, 1980, 1990 and 2001). Each option has its pros and cons. If we reflect on our experiences from past recessions, hopefully we can put together a lessons-learned guide for handling the current economic situation. Each of our perspectives on handling an economic downturn will be different depending on our personalities, the unique characteristics of our businesses and our niche in the market. Since the success of our businesses is dependent on our customers, staying closely tuned to their needs will enhance our chance of survival.

My suggestions for weathering the current economic storm include the following:

• Determine and pursue your unique market niche, products and services,
• Assess customers’ needs,
• Develop a business plan,
• Plan your business finances,
• Streamline processes/cut costs/improve products and services,
• Improve skill sets and capabilities,
• Take care of ourselves (our most precious resources).

You can read more of the specifics of David’s suggestions in his article in Issue 106 of The Professional Quilter. If your subscription is not current and you need to renew, or you want to start a new subscription, here’s a link to our order page.

In the Summer issue of The Professional Quilter, David Nagle wrote about the importance of keeping good business records. Considering the current economy, I think it’s very important to have an accurate picture of the operational and financial effectiveness of your business. Without it, we can’t make good business decisions.

Part of recordkeeping is knowing how long to keep your records. (I tend to keep too much for too long, so David’s advice is helpful to me.) Here are his tips:

Generally, you need to keep supporting records of all income, expense and credit items that you claim on your tax returns for the period of limitations the Internal Revenue Service requires for those items. This is defined as the number of years after your return was due within which time you are allowed to amend your return
or to claim a refund or credit. The information below is a summary of the IRS guidelines:

1. For most tax returns filed on time with no tax due, keep supporting records for
three years after the later of the filing deadline, extension deadline or actual
filing date.
2. If you had income that you should have reported (but did not) that was 25% in
excess of your gross income, keep records for six years after your final payment
was made.
3. Keep all employment tax records for the later of four years after the employment
tax became due or was paid.
4. Keep records to support any deduction for bad debt loss for seven years.
5. In cases of someone required to file a return (and does not) or in the case of
fraudulent returns, the IRS requires records be kept indefinitely.I suggest that
after the period of limitations for your supporting records has expired, then you
make copies on CD (or DVD) before destroying them. Then, store the discs in a safe
off-site location.

Now, what do you do with all the papers you’ve purged after following David’s advice?
It will take me too long to put them through the paper shredder, so I’ll have a
box ready for the next free shredding day in my county.

To read more of David’s article, which includes specifics on what records to keep
and a sample recordkeeping system, you can purchase Issue 104 or start a subscription
here.

The Summer issue is out and in the mail. I’ve heard from subscribers that it’s showing up in mailboxes. Here’s a peek at the cover:

Articles include a profile by Eileen Doughty with Alaska quit artist Linda Beach, tips for developing a blog as a marketing tool by Maria Peagler, a studio tour with longarm quilter Paula Rostkowski, guidelines for business recordkeeping by David Nagle, help with phrasing judging comments by Scott Murkin and a primer on understanding DPI for good digital printing by Gloria Hansen. We will have some excerpts in our ezine later this month.