Battling the innovations and lower wages of foreign competitors has long kept American manufacturers on their toes. But faced with these overseas challenges, many have found inventive strategies to stay ahead. Today, however, what is perhaps the greatest threat to American manufacturers is not foreign, but domestic: it's the U.S. economy.

Business owners in all industries find themselves pressed to keep up with uncertain economic conditions and the rising costs of doing business. In fact, they cite these two concerns as the greatest challenges in growing their businesses, according to the most recent Small Business Monitor, a semi-annual survey of business owners conducted by American Express OPEN.

But even in an economic downturn there are opportunities to be had -- if you're prepared to take advantage of them. The following tips will help you assess where you stand and help you prepare for the surprises and opportunities the current market could send your way.

Plan Not to Fail

The real difference in who weathers the storm and who doesn't often boils down to one factor: planning. Although no one sets out to fail, business owners sometimes don't have explicit enough plans to help them avoid failure. The trick is not only to recognize your challenges, but to create a plan by putting challenges -- and potential solutions -- in writing.

Write down ten specific challenges that your business faces, along with some possible solutions that could help you overcome them. The more specific you can be, the better. No doubt some of your challenges will immediately be obvious, but others may require devising some "what if" scenarios to pinpoint potential weaknesses in your business. For example, what if the vendor you rely on exclusively for components or raw materials dramatically raises prices, or worse yet, goes out of business? The relatively short amount of time that it will take to ponder your biggest challenges and brainstorm solutions could make all the difference between preempting crisis and falling prey to it.

Reassess Budgets and Major Expenses

For any business owner who's thinking about how to face challenges, one subject is sure to come up: cash. To keep cash flowing in your business, take a look at how successfully you predict expenses and assess whether you're allowing enough leeway to cover the unexpected. While running a little over budget in one area may not be a crisis, doing so consistently can quickly drain cash from a business. To avoid this situation, budget pessimistically, because a little padding can go a long ways in helping to accommodate the economy's unexpected turns.

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