For many small business owners, the main focus is on survival -- not growing the business. And, with the freezing of the credit markets and the slowing economy, the sentiment is certainly warranted. Hey, even companies like Google, Inc. (Nasdaq: GOOG) are cutting back.
So, what are some key survival skills? Let's take a look:
Get Paid: It's never fun to call customers who are behind on their invoices and ask for them to pay up. But it's a necessary skill if you want to survive the recession.
Thus, you need to be proactive (for more help on this, you can check out a recent column I've done on this topic).
Constantly track revenues and burn rate: You can setup a simple spreadsheet that has expected revenues and expenses for the next three months (it's really hard to predict beyond this). Make sure the estimates are conservative.
Visualizing this relationship will keep you vigilant and focus your attention on cash flows (by the way, a good book on cash flow is The Plan-as-You-Go Business Plan
Get a Mentor: Many small business owners have not gone through a tough time. So, it's a good idea to seek out a mentor or an advisor who has experience in dealing with such stressful times.
There are some helpful resources, such as SCORE (Counselors to America's Small Business). This is a nonprofit organization that is composed of a group of thousands of retired executives who help small businesses -- for free.
Be wary of new customers: In tough economic times, it is tempting to take on any customer. But this can be a mistake.
Basically, some customers can be the wrong fit for your product or service. Or, they may be looking for cut-rate deals and will ultimately not be profitable.
Why do we have a weak dollar?
Holiday hiring slow for retailers
Closing Bell: What sell-off? (AIG, ABK, EPR, MBI, JAVA, ORCL, ERTS)
Reader Comments (Page 1 of 1)
12-03-2008 @ 4:54PM
Jason said...
These are good tips Tom.
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12-04-2008 @ 11:05PM
Mary said...
Getting a mentor is a great idea, especially now. Another resource for free mentoring, especially for microentrepreneurs, is MicroMentor.org.
12-08-2008 @ 1:32PM
northviewl said...
All good ideas. Thank you.
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12-08-2008 @ 1:52PM
Bonnie said...
Our company is 32 years old and we have weathered a couple of these. We found opening the books to the employees had them make far more cold calls and ask clients while on their event if they had more events to come. They also always remembered to leave their business cards, etc. If you make them part of the financial success of your business, they will work harder on the bottom line. Ask customers to pay at time of service to keep cash flow going. Many customers are very happy to pull out their plastic so they don't have to deal with writing checks (which cost money for labor). We have even found the Federal Government can pay with credit cards. We always have a mentor but even better yet we have a board of directors that have twice a year meetings without us there comprised of our banker, accountant, attorney and others we respect.
12-08-2008 @ 6:43PM
Mike Sheedy said...
I am a SCORE counselor. An easy way to contact a SCORE counselor is through email counseling. Log onto www.score.org and request counseling from a counselor you select.
12-09-2008 @ 12:35AM
Dominick said...
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12-09-2008 @ 6:35AM
Leslie said...
Running a small business is never easy. I have been trying to figure it out for years. I have found from my own experience that you should start small or from home if you can, this will help control costs. If you need a lot of equipment, best to rent than to buy the equipment. Advertise affordably that fits your budget: classified ads, emails. You can't afford to stop looking for "good customers" they are the life blood of your business. Offer the best service that you can and offer your loyal customers special rates when you can: 10% off, 15% off won't kill you and you have to stay competitive within the market. Most importantly I have learned that if something is going to work, it will just work and if something doesn't work, it just won't work. The business will prove itself. So, if there is anything you can do: sewing, arts and crafts, cooking. You should do it and market it affordably.
1-02-2009 @ 11:07AM
applicant tree said...
Loved your suggestion for getting a mentor. They can be beneficial in many, many ways. Good read!
http://applicanttree.wordpress.com/2009/01/02/mentor-this/
1-12-2009 @ 1:12PM
borninblighty said...
Thoughtful tips. Appreciated. You may also enjoy these tongue-in-cheek tips on office survival - http://borninblighty.wordpress.com/