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Recent surveys reveal that the confidence of New Zealand business leaders in the economic outlook has hit the lowest level in the past 35 years. With all this talk of doom and gloom, it would be surprising if you weren't just a bit worried about how the economic trends over the next year or so will affect your business.

There is no doubt that the past few years have been good for business. But now it appears that the summer is over and we need to prepare for an economic winter. Rather than just worry about how you may be affected, there are a number of proactive measures you can take to ensure the downturn does not lead to your downfall.

1. Make a plan
It's time to look forward now to what may happen in your market and in your industry and plan ahead. Don't wait until the downturn has started to take its toll, when you can only be reactive to the pressures that hit you.

Analyse your current situation and take stock of where your strengths and weakness are. Then make a plan to make the most of your situation, by focusing on your strengths and shoring up your weaknesses. Don't be over cautious, but be aware of what may happen and make allowances and contingencies in your plan.

If you focus on your strengths, you may find you can grow in a shrinking market by outdistancing your competitors and taking market share by being better than they are.

2. Don't cut back on marketing
Often when times are hard, we think about how we can cut back on expenditures. This is a good policy, but don't make the mistake of cutting back on your marketing.

Now is the time to be even more visible to your market. The key is to make sure you are not wasting your marketing dollars. Make sure every dollar you spend on advertising and promotion is accountable.

Keep track of where your sales or your enquiries are coming from and measure the return on investment you are getting from each of your advertising methods. Cut back on the areas where results are poor and redirect that expenditure into the better performing areas.

Don't spend any money in any advertising vehicle when you cannot justify it with a clear and positive return on investment measure. Do this and don't be surprised if you actually increase your sales while your competitors are complaining about how tough it is.

3. Cut back on waste
Analyse your operations and identify where you have become complacent and excessive during the good times. See where you can cut out expense without affecting efficiency and effectiveness.

Review your expenses from you financial statements two years ago and see what has changed. See if you can cut back to the level of two years ago. Look at your stock levels and see if you can quit slow-moving stock or reduce your purchasing levels to reduce your inventory investment over the next few months.

Check your overtime levels and see if it would be better to employ an extra person rather than pay at time and a half rates. Review you phone plans and see if you can get onto a better rate.

These are just some of the areas where you can find savings. Don't be fat and slow when the tough times come. Get in shape now and be mean and lean and ready to fight the battle.

3. Focus on quality
Develop your processes and systems to ensure your products or service improve in quality. In most markets, it is the lower end products that get cut back the most in tough times.