The current recession is bad news. Seriously. Real people are losing real jobs. Real companies are going out of business, excepting the ones “too big to fail”.

While I could rant for a whole series of blog posts about the bailouts right now, I’d much rather focus on the upside of recessions, this one in particular.

Let’s face it: recessions are a fact of life. Our financial culture dictates this. When the levers of commerce rely upon the ever-greater accumulation of things, there has to come a time when people, as a mass, decide to rein things back for a while; catch their breaths, and focus on paying down the debt instead of getting another big-screen TV.

Like the tides, it’s the ebb and flow of capital that tells us that things will get better again soon. Ultimately, a recession means “no growth”, and so we’re consigned to the fate of not growing our business for the next 12-18 months.

So, what does an enterprising business do when faced with stagnant market growth? Fortunately, most companies choose to turtle in these conditions: reduce the scale of operations, shut down any experimental programs and research, and basically sit unchanged until the markets come back. I say this is “fortunate” because their short-sightedness is your opportunity. While your competitors are huddled in their shells, you have a golden chance to bring out new initiatives, new products, and new processes that will outpace your rivals.

My favourite example comes from Apple. During the last recession in 2001, when most companies were sitting on their existing products, Apple was spending feverishly, building the infrastructure for their new music business, developing what ultimately became the iPhone, and investing in their operating system and hardware businesses. Apple came out of the recession a dominant player in the technology industry. They did it because they were smarter than the rest of the market.

A recession is a test. Be bold, or wither. Be smart, or fade away. The markets never sit still, but they’re less forgiving now. People still have to spend money, and if you’re not doing anything to give them a reason to spend it on you, then you’re not likely to fare well over the next year or two.

Every business requires some level of innovation, of creativity. When I think of my customers, every one of them has a creative angle on their industry, a way to draw customers to them instead of a competitor. Now, more than ever, you should be thinking of new ways to bring those customers in, and making them happen.

For example, right now I have two initiatives in the planning stages for the new year: one is to push my Website in a Day service to specific markets that are likely to respond to its low cost and ease of use. Another is the development of a backup service for writers. In both cases, I’m diversifying slightly from my core business. But with the right plan in place, and a little luck, I’ll not only survive the recession, but come out stronger than before.

There’s a popular meme out there nowadays: “We don’t choose to participate in this recession.” That’s blindness, arrogance. This recession is real, folks. But with a little judo, you can turn it to your advantage.

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When I was a young lad, I worked summers for my dad, a general contractor. It remains a long-standing source of irritation that I was never actually taught any transferable skills during my tenure with his company, but I did master the arts of digging, sweeping and carrying stuff.

In the years since, my Dad and I have found we have a lot in common. As business owners, we both deal with clients. But I think a lot of people wouldn’t recognize the similarity in our businesses: my Dad, a contractor, deals in “real things”, whereas my wares are purely virtual. When someone pays to have an addition put on their home, they can see the lumber and drywall that they’re paying for; these are physical goods that were clearly manufactured, shipped and assembled. Most people see the direct relationship between the money they pay, and the goods they receive.

When things get virtual, the relationship between money and goods becomes more tenuous. Where my dad makes something from nothing, I, well, make nothing from nothing. Web sites, logo designs, magazine articles and the rest of it are nothing more than bits on a computer. One has only to look at the proliferation of music and software theft on the Internet to appreciate the value that many people place on virtual goods.

But the truth is, my business is incredibly similar to my dad’s. Through the use of labour and materials, we both produce finished products to our customers’ requirements. And — here’s the key point — when changes are required, there’s always a cost.

Change management is a broad topic, and one that’s loaded with pitfalls. Here’s my best rule of thumb regarding change management:

The later in the project you request a change, the more expensive it’ll be to implement.

Simple! Here’s an example from a world most people readily get. Say you have an addition put on your house. You initially decide the fireplace will go on the north wall. But let’s say that later you change your mind and you want it on the west wall. When is it the cheapest to make that decision? Before a single brick is laid, naturally; and clearly, it’ll be most expensive when the job is done, and the whole addition has to be torn apart to change it.

So too with my work. But, while the construction example is laughable in its obviousness, the same isn’t true for me. When the physical result of my work is nothing, then it should be easy to get a new nothing, right?

Some people suggest that change requests are a good thing, since they increase the size of a project; ultimately, they put more money in my pocket. And this is true! Change requests happen for many reasons, many of them legitimate. For example, one client, for whom I was building a loan approval application, landed a huge client in the middle of our development process, and wanted the application changed to suit their needs.

But there are times when whim, misunderstanding or simple indecision become the culprits. When that happens, I sometimes can’t convince the client that a real change is occurring; ultimately I either have to give up a chunk of my compensation for the change request, or damage the good will that I ultimately value more than anything among my clients. Unfortunately, I can’t point to a fireplace and explain how tearing it out of a wall would add a lot of work!

Even so, I actually feel a bit sorry for my dad, because while most people can appreciate the costs involved in changing their mind, he still has clients who freely do so without regard for the cost. In my business, it’s getting easier and easier to accommodate change requests, because the tools for building web applications and designing graphics are getting dramatically better. Meanwhile, it’s always going to cost the same to move a hole five meters to the left.

I’ve done it, believe me.

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