Here are some tips from the U.S. Small Business Administration about what you can do to weather the current challenging economy…
Business Basics
- Consider closing earlier on slower days.
- Set a time each week to handle routine tasks, bills and paperwork.
- Create a Board of Advisers who can be a good source of advice.
- Think tactically: Focus on the next three to six months.
- Recognize that you and your business are two separate financial entities. Plan for the financial needs of your business and ALWAYS keep the money separate. Your business gets paid first.
- Ensure timely filing of government paperwork to avoid fines and penalties.
- Have a plan B if undercapitalization surfaces. Know how long you can ride out the storm and when you need to implement plan B.
Employees
- Don't skimp on service and quality by being understaffed. Use part-time workers and subcontractors to fill gaps.
- Keep employees informed of the current business situation and ask them for suggestions for improvement.
- Ask employees for cost-reduction ideas and implementation methods.
- Avoid reducing training budgets. Create in-house training opportunities. Cross-train staff in different roles. Take advantage of
low-cost training opportunities offered by the Chamber of Commerce.
- Avoid layoffs. Offer reduced hours of work instead, then when the economy recovers you still have your high performers ready to go.
- Eliminate employees who are not performing, so you have room to keep the high performers.
Marketing
- Don't cut back on marketing efforts. Research has shown that businesses that cut advertising during recessions lose market share and are slower to see a recovery when the economy improves.
- Remember to network. This can be one of the most cost effective tools you use.
Monthly networking programs sponsored by the Chamber provide valuable visibility and
weekly programs help you develop long-term relationships.
- Consider increasing your marketing efforts. Along with reassuring your current customers that you are still there to serve them, marketing can help you reach new markets that will sustain your business now and facilitate its growth in the future.
- Review your marketing campaign and focus on those activities that generated the most sales in the past
- Differentiate with strong marketing to drive leads and sales
- Market your business as a low-cost alternative.
- Consider publishing email newsletters and sales alerts. Let people sign up for them on your Web site.
- Consider bundling your products. Provide special sales offerings or more attractive pricing, such as buy two get one free, get free glass of wine with order of calamari, etc.
Location
- If you're in need of additional cash flow right now try renegotiating your rent. Offer the landlord a lease extension or offer to make a balloon payment in exchange for lower payments over the next six to 12 months.
- Look for opportunities to reduce rented space. Sublease if possible.
- Consider changing locations. Is there an adequate, less expensive location? Do you even need a storefront, or could you operate from your home?
Cost Cutting Ideas
- Meals and entertainment -- Have coffee with clients/prospects instead of lunch or dinner.
- Travel alternatives -- Use internet-based meeting and conferencing services if possible.
- Professional services -- Ensure you are getting the best service at the best price for services like accounting, Web hosting, etc. Fees vary widely with such services. Negotiate fees; switch if necessary.
- Utilities -- Do you really need all those perks on your phone line? Use energy-saving techniques and equipment.
Source: US Small Business Administration/South Carolina District