As I walked around ASR, I came to the unhappy conclusion that of all the people at the show- retailers and exhibitors- very few of them were old enough to have actually been through a real, honest to god, actual recession as business people. I came to the even unhappier conclusion that I was one who was old enough and, indeed, had.

I don?t mean the kind of minor inconvenience we had in 2000-2001 in the wake of the internet collapse where consumer spending hardly fell (or maybe it didn?t), and the action sports industry barely noticed it. I mean the kind where consumer spending falls and people lose jobs.

I don?t mean a ?Great Depression? kind of thing, though if the financial markets don?t get freed up, this could be a severe recession. I mean a normal kind of recession that happens from time to time and is kind of normal as business cycles go. Pain, but not disaster.

Most of the people I talked with said things like, ?Maybe it will be short,? or ?I think it?s close to the bottom,? or ?It won?t hit our industry.? I hope they are all right, but I?m pretty certain they aren?t.

My best guess is that this is going to be a normal, typical, standard kind of recession at best. And almost none of you have ever managed through one.

Just to put things in perspective, in 1987 the market dropped 22.6% in one day. So when the talking heads on TV tell you that the drop on Monday, Sept. 29 was the most ever in terms of total points, you should take that with a grain of salt and recognize that it was about 9%. Or at least you should have some perspective on it.

That doesn?t mean you should relax. The drop in 1987 was basically a glitch in the biggest bull market in history that started around 1982 and lasted until 2000. But we all know the phrase, ?What goes up must come down.? In statistics they call it regression to the mean. Over the long term, the price earnings ratio on the S&P 500 has been about 15. At the peak of the last bull market, it was somewhere around 30. After the last couple of weeks, I?m thinking it?s around 21 (I haven?t seen a calculation after Monday). If we?re going to get back to an average P/E ratio of 15 that doesn?t mean it goes down to 15 and stops. It means it goes, say, down to 10 and then bounces. We had like an eighteen year bull market. Is it so hard to believe that we could have an eighteen year bear market? We have in the past.

I?ve had, over the years, a bad habit of telling people things they didn?t want to hear, and maybe I?m doing it again. Maybe, also, I?m being too negative. I hope so. My crystal ball is as cloudy as the next guy?s.

But I?m doing it in a good cause. I?m telling you that the odds are that you now have to manage your businesses in an environment you?ve never experienced before. You have no choice but assume I?m right, because the risk of doing otherwise is too high.

So build your balance sheet. Manage your extension of credit and collect your receivables. Work closely with your financing source to make sure you?ll have the credit you need. There are major companies out there (not in our industry as far as I know) who have gone out and borrowed their whole credit line before it could be pulled. Control your inventory. If it ain?t selling, mark it down hard and fast.

This is good advice any time, but especially now. And if you do have a strong balance sheet, look for opportunities. At extremes they always exist.

Jeff Harbaugh is a consultant for the action sports industry and works with companies to identify and focus on critical business issues and opportunities fundamental to the bottom line.

For more information, visit www.jeffharbaugh.com.