N THE BEGINNING... The day was June 2, 2007 and the self-proclaimed day of the new economy. This was the day that began a four week series of devastating financial events that I will always remember. The scud missile came in at 4:15pm from a Richmond California title company. The escrow officer called and said, "The lender has decided not to fund the Rohnert Park property purchase because that loan has been pulled from investor sheet". The was the day where I expected to close a real estate transaction to receive about a $6,000 commission check. Fast forward to the middle of June...another escrow failed to close because of investor refusal to fund. The loan program was no longer available. And for a third time, during the first week of July 2007, a loan did not close. Total income unreceived: $12,000. These events happened for hundreds of real estate agents and loan officers throughout the State of California. The public was not empathetic. Media reports of unaffected consumers wagging their fingers accusing real estate and loan officers of unfairly making above average incomes. Now the public was happy that real estate agents and loan officers were losing nice homes and cars and falling from their good lifestyles. "Go out and get a real job" was the comment often heard and reported in the media. Everyone working was happy to see those in the real estate industry fail until...it started affecting their jobs. Real estate supports just about every industry in the marketplace. Nuff said! Now people long for the days when they could work and tolerate those pesky real estate professionals earning $10,000 per month. THE CREDIT CRUNCH...FOR BUSINESSES Banks began to deny businesses short term loans. Little did we know that many businesses used short-term loans to meet payrolls and cover accounts receivables. With banks tightening business loan standards, companies started laying off employees to align expenses with cash revenues. THE CREDIT CRUNCH...FOR CONSUMERS Consumers, no longer with access to the falling equity in their homes, began defaulting on mortgages. With credit cards at maximum limits, consumers stopped shopping and spending impulsively. No more Chuckie Cheese pizza parties. No more $50 dollar car washes. No more $120 family dinner tabs on Friday night. No more car shopping on Saturdays to get the newest Lexus or Hummer. Plus, with gas prices at $4.60 per gallon in California, driving was the last thing on people's mind. THE VIRTUAL BUSINESS TSUNAMI Then, almost overnight, businesses discovered that less and less customers were patronizing personal care and professional businesses such as hair salons, auto repair shops, CPA firms, and dental clinics. In one major West Coast city, 283 hair or spa salons went out of business. Auto repair shop service bays stood idle as car owners deferred vehicle maintenance until the last minute. The dental industry, already saturated by the number of dental practices, saw patients foregoing intermediate and necessary dental procedures because they could afford the deductible or the balance payable by patients after dental insurance pays its portion. CPA firms begin to layoff accountants as the number of billable hours shrank. You probably could add more stories to this blog. So what can a business do to return to profitability and capitalize on this new economy?