Did you hear about CompUSA closing its doors? It was the largest computer stores in America. In 2006 it had $4 billion in sales. Last year, sales tumbled to $1.5 billion and now the company is closed. It's mind-boggling how the richest man in the world, Mexican billionaire Carlos Slim, could turn a multi-billion investment into nothing in just eight years. The biggest mistake the company made, according to analysts, was underestimating the need for marketing. While the competition fought it out for customers with aggressive advertising, CompUSA died trying to save some money.

The story sounds familiar to me.  As a newspaper publisher for several years, I saw plenty of businesses fail. During the slow years, I got calls from businesses saying they needed to cut back on their advertising. Because of it, they lost customers.

You can see how this kind of downward spiral leads to a failed business. The perception of an economic slow down becomes a self-fulfilling prophecy.

Successful businesses maintain their marketing budget in soft years. Why? Because, while your competitors cut back on advertising and lose customers, you can pick them up and grow your business.

Think about it. Look at the big, successful players in your industry. Are they cutting back? Probably not. They keep growing and building their brand in good times and bad. Their marketing is consistent.

When I say marketing, I’m talking about advertising your business: display ads in newspapers and yellow pages, spots on the radio, flyers mailed directly to households, and networking in the community.

What is an economic down turn, anyway?

A recession is a decline in the gross domestic product (GDP). Last year, even with falling real estate prices, the local economy grew by about 5.5 percent in Paso Robles and 3.4 percent in Atascadero, according to the forecast.

If your business was profitable last year, then even with zero economic growth, you can be profitable this year, as long as you maintain your market share.

Don’t make the mistake of slashing your marketing budget by 50 percent because you see an economic downturn of a few percent. That just doesn’t add up and it will cost you customers.

At my company, Access Yellow Pages, we practice what we preach. Last year we doubled our marketing budget to 10 percent of our total expenses. The result: we grew revenues by 36 percent and added 150 new customers.

The lesson here: don’t fall into the trap of a downward spiral.

Author Scott Brennan is owner of the North County Access Yellow Pages. He majored in economics at Cal State Fullerton and worked in newspaper publishing for 12 years. You can reach him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it