I normally start my days very early and one of my simple pleasures is the 7:30am walk to the bus stop.  Of course this is for the grade school kids, the older kids are much to cool to have their parents at the bus stop,

This morning I had a great conversation on just what to invest in during this recession.  Not what stocks to buy, but rather, how should your business use it’s precious capital.  (I’m fortunate to have a diverse bus stop.)

James Surowiecki’s Financial Page article in The New Yorker, “Hanging Tough” was the basis for the discussion.  Surowiecki’s recall the positions taken by Kellogg and Post during the Great Depression.  Post pulled back on advertising and reigned in expenses.  Conversely, Kellogg doubled its ad budget and actually rolled out Snap, Crackle and Pop.  Kellogg’s profits rose thirty percent.

So what should you do with your capital in this tight market?  Midmarket companies strapped for cash might find it hard to invest in anything these days, but there are opportunities.  Opportunities to give customers what they need, not just what they want.  Listening becomes your biggest asset.  If you have historically thrown your product or service over the fence and hoped someone bought it, you are in trouble. Listen closely to your customers’ needs. Now is the time to really know the value drivers for your company and what drives value for your customers.