Here are some signs that we are not only entering into a recession but into a period of stagflation as well.

1. Consumer prices have gone up 4.1 percent during last year. This was the largest increase in 17 years.

2. Average wages have decreased 1.4 percent in 2007.

3. Energy and food prices have been increasing at a rapid pace.

4. High energy prices result in inflation, even in a weakened economy.

5. Consumer goods sales in January 2008 were the lowest level in 40 years.

6. The housing credit crunch continues to fuel the stagflation formula.

7. The job market is becoming tighter and tighter.

8. Large merchants are reporting declining sales while some are closing their doors for good.

9. During January Employers have eliminated jobs at a rate which has not been seen in well over 4 years

10. The Federal Reserve is unable or unwilling to act to prevent the problems.

Read more about stagflation and what you can do on my blog: Practical Small Business Info | The Stagflation Threat.

Based on my research over the past few months I have come to the sad conclusion that we are currently right at the start of a severe recession. As I have worked toward educating myself on past recessions and the Great Depression I looked into the major economic factors leading up to these economic downturns. I detailed my findings in this article, What Caused the 2008 Recession?, on my blog. I think that you will find it an enlightening exercise.

The US economy is quickly falling into a deep freeze this winter. A severe recession is a certainty at this point. If you research it you will discover that this time is quite unlike the dotcom boom/bust of 2001-2002. Now we're facing a banking bubble. The history of recessions indicates when these bubbles burst we're in for a lot of trouble. Read More on this at: History of Recession Echoes in Today's Recession

There is a severe recession facing us right now. Some try to deny it's here by hiding behind lagging indicators or ducking behind positive platitudes such as "I choose not to participate". This won't help you as the recession intensifies over the next few months.

There are a number of signs that a severe recession is in our faces right now, such as the increasing use of credit to buy consumables such as groceries to drops in advertising budgets to the changes in the way some products are marketed. I describe them more in this article, Prepare Your Business for the Economic Recession

Now that you know a severe recession is in the cards, you can act to prepare your small business for it.

I won't lie to you. Every business will face a downturn during this severe recession. However, if you're positioned right, your small business can survive and even thrive during a recession, even with the limited growth. Here's a list of money making business ideas that might inspire you in spite of these difficult times: Making Money in a Recession

This one is tough to write and read because it is so brutally honest. You can't be a nice guy in small business, you have to be tough and be ready to be a bad guy from time to time. If you don't want to do this I recommend you go back to your cushy corporate job where you have a HR department to do your dirty work for you.

In the severe recession, you'll need to use a number of tactics to get the most from your employees. Some of these are rather tough and controversial. You can find out my answer to recession employment practices in this blog article: Best Recession Employment Practices