NO ONE knows how long our economic downturn will last. No one even knows whether or not we are in an actual recession, or merely a slowdown. A recession is defined as two consecutive quarters or more of a declining gross domestic product. While some indicators point to a weaker economy, and surely we here in Hawaii will feel the crunch with less tourism, there is still room for optimism and growth during this time. Since we're not moving (hopefully) and plan to own and operate our businesses through the storm, we must all look for ways to minimize the impact and ensure our business survives.

Here are some tips to trim your business sails and ride this out:

1. STAY FLEXIBLE. Don't lock into long-term commitments that you may not be able to meet. If you are leasing space, or equipment, keep the lease as short as possible in case your needs change.

If you need additional staff, you may not want to take on a full time employee at this time. Instead, consider using a temporary agency, or engaging independent contractors.

Keep an eye on your cash flow, and monitor receivables carefully, which can be difficult for you to maintain if you have slow-paying customers who may also be struggling in this economy. Make sure you have a line of credit in place to carry you through the tough spots.

2. CUT COSTS If you can't boost sales to maintain profit margins, reduce overhead. Think of your business as a boat that needs to jettison everything that isn't essential in order to stay afloat.

First to go overboard should be any discretionary spending, such as business travel and entertaining. If you can't let these go, opt for low-cost alternatives. Look at subscriptions and memberships when they come up for renewal. Which ones do you need to keep? Let the rest go.

Use conservation measures to save on energy costs. Change to energy-saving light bulbs, power down computers TVs etc... and restrict business driving whenever possible.

advertising. You may think you're saving money by cutting back, but, you will find yourself making up for it and then some with a last minute, poorly executed marketing blitz conducted during a desperate moment.

Advertising. It's all about visibility. While you may not be able to afford a full-page ad in the newspaper, there are many ways to advertise, so consider HOW to make the most of a limited budget. An example is to co-op your advertising with a shop neighbor, or your favorite vendor, anyone with a complementary product, and with the same customer audience.

Targeted press releases and calls to editorial staffers can go a long way, and the publicity is free. Work to get published in trade magazines and local publications. You can also look for opportunities to be included as an expert in other media outlets - TV, radio or the Internet.

Don't Cut Your Prices. Slashing the cost of your services sends a horrible message to customers. Your value does not diminish because of lean times. Focus, instead, on customer satisfaction and delivering the most you can for the dollar you are charging.

Expand Your Territory. The services you provide may be fresh and innovative in a neighboring market. Don't be afraid to look for business in another state or even internationally.

4. CATER TO YOUR CUSTOMERS.Recognize those who have been your loyal customers. Listen to what they are saying, and pay more attention to their buying habits. Customers become more discriminating in tight economic times, especially when it comes to cost. They do more comparison shopping. How do you stack up? Be sure to add value to your products or services, such as offering e-coupons, a free service call following a large purchase, or free shipping. Ask your favorite customers for reviews of your products or service. Post these comments on your web site.

5. USE TECHNOLOGY. It can help you do more for less money. Conference calls, rather than business travel, online payroll services, tele-commuting are only a few options for using technology to save on business expenses. Great ideas and methods for doing business are born of necessity, so look for those 'gems' which result from times such as these. Now is a good time to put that blank sheet of paper in front of you and rethink your business from scratch, and if you have the courage, to act on it....Higher costs may actually be a positive answer if those costs produce what the marketplace wants.