Unless you have been hiding under a rock, you would not have failed to notice that the global economy has gone into a spiral with the collapse of major financial institutions in the US, painfully high oil prices and unstable global markets all leading to a worldwide economic recession. The Indian economy too has not been spared for, yes, we do live in a “flat world” where everything is interconnected. We can expect a reduction of growth to under 7%, a dramatic drop in US and European IT imports and outsourcing, a very high interest rate, increased middle class unemployment and a drop in consumer confidence. But is it all doom and gloom or can an SME ride it out and still survive?

While most small businesses will be tempted to button down, cut costs and visit the local astrologer, it may be worth seeing this period as an opportunity instead. Here are a few ideas of how you can thrive in this slump:

Improve your relationship with your existing customers – CRM is one of the subtle  arts that always gets neglected but is never more important than in a downturn. Invest carefully in ideas and systems that will help you keep your customer base connected and reassured. Look at tools like SugarCRM, Saleforce.com and HighRise and see how you can keep your customers near.

Outsourcing from larger players – as the big boys slash jobs and cut costs an opportunity is created for an SME to offer efficient lower cost services for outsourcing from back office to software development and creative services.

Finding new sales channels – while one market tumbles, many more do open up. After the Iraq war started, many Indian companies found work in large subcontracts in the Middle East and elsewhere supplying US and allied troops. While the US may slow down, Europe is still buying and so are Russia and China. Also remember, that in this recession the number of government, infrastructure, and institutional and foundational contracts available for bidding will increase considerably and so a slight repositioning may open new doors.

Improving your branding – use this time to clean up your brand and position it better in the marketplace. Add substance to your website, start a newsletter, launch a Blog, attend conferences and get out there. Now is the time to build more relationships in preparation for the inevitable upturn.

Getting lean and efficient – yes getting lean is very important now but not just by cutting costs or shedding deadwood. One should consider mapping all processes and embracing workflow efficiencies like Lean Six Sigma. Look at every single one of your processes and see how you can improve efficiency, cut out fat and improve performance.

Recruiting real talent – fortunately for you there is going to be an increase in talent available in the market through layoffs and that too at a lower price. Now is a good time to find that MBA or Six Sigma Black Belt you always wanted to hire.

Never stop learning – use this time to catch up on all your knowledge. Get your staff trained in new tools, software applications, process management systems and communications methodologies. There are tons of short courses available across the country to help you improve your own knowledgebase and capabilities.

Here’s wishing you a safe voyage as we ride the waves of this recession.