The bad news is delivered every day. Job losses mount. Banks close. Credit disappears. Everything that tastes good is bad for you. It's enough to make one lock the front door and take a long nap. But don't batten the hatches and hunker down to wait out the recession, advises Suzanne Caplan, author, consultant and CEO of WomenEtcetera.com, a business portal and social networking site for women over 50. "Now is the time for action," Caplan advises. "Be proactive; play offense."

The first thing Caplan recommends is a reality check--which she concedes runs counter to the entrepreneurial character. "Entrepreneurs by nature are very optimistic people," says Caplan, herself a lifelong entrepreneur. But, she warns, "There's a fine line between optimism and denial."

The first part of the reality check is to take your business temperature. "Take the temperature of how you're doing today," she says. How stable is your money? How bad is your debt? Who are your creditors? "If you can talk to your creditors while you're still paying them--it doesn't matter whether they're secured creditors or unsecured creditors, whether it's a bank or whether it's a vendor--and share with them how your business is going now and what you're doing, you'll begin to build some confidence with them, and you might be able to make some kind of an arrangement with them that'll take the financial pressure off you."

Second, if cash flow is slow, communicate with creditors. Perhaps you've run up a big bill with a primary vendor because of that slow cash flow. If that company likes you and wants to continue doing business with you, it might be willing to make some accommodations, Caplan suggests.

"If you call that vendor, it may be possible to turn that current amount into a one-year loan ... and then keep current stuff current and be able to keep your credit with that vendor," she says. "Depending on their financial stability--and if you offer them some interest--that may work for them and for you. They get to keep a customer; they know they're going to get their money; and you get to keep your credit open."

Caplan advises doing the same with your bank. "They don't want to write off something it's possible they're going to collect," she says. Arrange a meeting with your banker, but go into that meeting with some idea of what your desired outcome is. "If you say, 'I need to pay interest-only for the next six months and then resume principal payments,' you've given them a tangible starting point," Caplan says. "And if you go in and say, 'I see business being flat for the next six months, but these are the steps we're taking that will have this turned around in six months,' they might as well take the risk." Caplan says.

How Do You Turn It Around?
Caplan offers the following tips to help you turn your business around:

1. Look for new markets: Expand your product line or your services, Caplan advises, or expand yourself geographically. She adds, "Always remember that even with a dramatic 6 percent fall in GDP, that means that 94 percent of all the economic activity continues on. The very weakest people in the ecosystem fall off fairly quickly. So the supply balances with the demand in most businesses fairly early."
   
   
2. Develop alliances. "Look around at where you have good synergies and can develop strategic partners," Caplan says. "Share the expenses of the marketing or share the expenses of developing a co-branded product, and go and attract a larger business."
   
   Caplan adds, "There's no telling how you can collaborate with someone." One of her customers is a printing company. "They're doing a strategic partnership with a mail house to offer end-to-end services." Neither one is big enough to do it alone, she says.
   
   
3. Reinvent your business. "Most entrepreneurs have a short attention span," Caplan says. "We get bored in our own businesses, anyhow. Here's a chance now to reinvent it."
   
   She adds that reinvention doesn't necessarily mean predicting the future. "You can reinvent it by taking it back into the past. I just saw a television show that I found absolutely appealing about the old restaurants that are still left in New York City," she says. "There's a wonderful hunger for nostalgia, and a recalling of an easier time. So you can take your company and turn it to the past and reinvent it that way, as something more nostalgic."
   
   
4. You have to have a plan. "Where are your sources of revenue going to come from?" Caplan asks. "Write it down. Write what new customers you're going after and how you're going to do it. Look at your current financials. Look at where you want it to be. Figure out how you're going to get there."
   
   
5. Sell your assets, or buy new ones. There are a variety of ways to improve your financials, Caplan says. You can reduce debt or increase margins. You can increase your bottom line or sell your assets. Alternatively, you might be able to buy additional, used equipment and double the size of your business within your existing square footage. "Equipment is all over the place. It's going on e-Bay," she says.
   
   
6. Lay off employees. "You have to look at things like getting rid of full-time employees and hiring project workers," Caplan says. "You've got a great opportunity to get project work done virtually."
   
   
7. Keep employees clued in. "One of the things you need to do with employees is to give them as much information as you have. If you want to run a company calmly, you don't let people who work in it have no information and wonder if they're going to have a job next week," Caplan says. "You need to tell them if they are or tell them that that may be at risk." Ask them for ideas, she suggests.
   
   "But if the moment comes that you are going to have to lay people off, you need to sit down and talk to them about alternatives. Maybe they can become part-time employees and maybe they can become freelancers. I suspect that we're gong to have a lot more of Myself Inc.--sole proprietors going around doing a variety of jobs--than we've ever had. They may not all hire other people, but they'll be working for three or four companies at one time."
   
   
8. Network. Women have an inherent advantage when it comes to networking in bad times, Caplan says. "Men are good at power networking. Women are exceptional at support networking. And this is the stage of support networking," she says. She cautions, however, "You need to be careful with your networking at this point. You want to network with people who are doing things, not with people who get together and have complaining sessions."
   
   

If you don't own a business, Caplan says now is a good time to start one because space and assets are cheap. For existing businesses, it's a great time to upgrade your space. "When everybody's doing well and you want to get into that hot mall, that's when they're charging you the most amount of money. When space is readily available and nobody wants it, you can make creative deals."

When everybody is in it together, the people who win are the people who are the most aware. Look around and understand that we're all fellow travelers. If you can get your wits about you enough to have a conversation with the people you need and the people who need you, you'll have all the information you need to get it stable and get it to the next level.