It's a fact of life in turnaround consulting: the stormier the economic climate, the more calls we get from businesses and bankers who need our help.

2008 was a year unlike any most of us have seen in our lifetimes: the real estate bubble burst, the financial markets melted down, and the tremors have reverberated throughout all segments of the economy. Our auto industry remains in turmoil, the banks have not righted themselves. Retail sales are down, unemployment is up, and no sector of the economy has demonstrated immunity to the recent surge in bankruptcy filings. Our new president has asserted that our economy will recover, while reminding all of us that the work that goes into the recovery will not be easy. There is little doubt that we needed an economic stimulus package, yet more than a few experts have questioned whether some of the components of the $787 billion plan approved in February will be effective. And the President has vowed that he'll fix or discard any of the pieces that aren't working.

Noting how all of these different scenarios for financial distress have come into play simultaneously, one Delaware bankruptcy attorney described the situation as "a perfect storm."

For 2009, we look for more of the same. While there's ample reason to believe conditions will improve, it's just as reasonable to believe that we haven't hit the bottom yet.

In the past year we have witnessed many businesses hurting because the recession arrived before they could solidify gains achieved during a period of expansion. Others find themselves in danger because the working capital they need to pay their bills is no longer available. And then there are the companies whose business model is not working, either because it's inherently flawed or because top management isn't making the right decisions.
We hope those descriptions don't fit your business or, if you recognize any of the warning signs, that you realize that it's time to regain your footing. Regardless of your situation, you now have an opportunity to take stock — to assess where you are now, and to consider where you want to be.

Use this slowdown to reflect on how your business and your industry will change when the recovery takes hold. When the recession ends, the businesses that will thrive will be those that develop a plan to prosper and have the cash to take advantage of the opportunities that are sure to be readily available.
While this is a time for caution, it is also a time to anticipate change. The fear of failure is real, but we cannot let such fears control our decisions.