Running a small business can be exciting and challenging, succeeding as an entrepreneur and small business owner can mean fulfilling a lifelong dream. But like most things you have to “be in it to win it.” You have to survive and try to thrive in both the good times and the bad. You certainly don’t want to follow an economic downturn down the drain. To succeed in business you have to stay there and keep it running. Planning for future successes and expansion drives self-made entrepreneurs and keeps them looking far ahead. The thrill of taking our business higher and higher is the inspiration that keeps us up at night. Amidst the fun of dreaming of absolute world domination there is a small gray cloud that needs attending. Every small business owner also owes it to him or herself to plan for lean times.
It doesn’t have to rain to pour
Small businesses don’t have to incur major economic recessions or depressions to be adversely affected. Slight changes in the economy, the weather or general conditions can have a huge impact on a business running on a small margin or with no “rainy day” plan. It doesn’t take much more than the city digging up your sidewalk or street to have a big impact on walk-in traffic for a storefront. An unseen event in an oil producing country could send fuel prices sky high and the price of your goods and shipping will soar. With a few contingencies in place you can put some recession-proofing plans into play.
Most businesses today have learned to keep their overhead under control and expenses in check. Luxuries aren’t as common as they used to be so most entrepreneurs don’t have to be reminded that fancy cars and offices don’t usually justify the return. Now you have to keep any eye on all the expenses. Interest rates are at an all time low but it’s still wise to keep your lines of credit and loans to a minimum. Don’t overextend yourself. Keep close tabs on your outstanding invoices. If you have a tendency to get behind use a service like WePay to invoice customers and collect your money. Don’t let your customers get too far in debt to you. If the economy shifts and they haven’t taken steps to recession proof on their end you might just end up holding the bag, stuck with the debt.
Become the Yoga Master of the small business deal. Ask for flexible terms everywhere you can. Just because a Landlord asks for a 5 year lease doesn’t mean he won’t entertain an offer to go for a shorter term. Ask for month-to-month deals, keep your options open. You might be able to take advantage of a flexible workforce by using temporary staff or contractors during busy times. This also saves the expense of keeping people through unprofitable seasons. Listen to your customers and be flexible enough to make changes in your own products or services.
Stay on top of the latest innovations in your line of business. Get up on, study, read and subscribe to information on the latest technology to make sure you are armed for today’s face-paced world. Changing sales systems or introducing new sales and inventory software has kept many small businesses alive in a changing economy. Been to a Tower Records or Border’s Bookstore lately? It’s not hard to notice the early adapting businesses that gave up their brick-and-motor stores and went online are still thriving while their competitors have vanished.
Companies that are advertising and promoting via social media are using technology to gain a whole new consumer base. The ones that use technology to source their customers have more access than ever to personal information, interests and preferences. Targeting customers and communicating with just those who are interested in you and what you do, say , sell or stand for is easier than ever. Technology allows you do drill down to a hyper local area and reach out to those people who can really make or break your small business.
Don’t wait until it’s too late
A very rich and wise man once said “the secret to business is knowing when to get out.” This multi-billionaire knew it and as a small business owner you should, too. It doesn’t mean knowing when to quit but knowing when to get out of a contract, a bad vendor or client relationship, when to move the business online, when to close a store or enact the changes you must to make your enterprise survive in a recession. The smaller the business the bigger the loyalties and personal relationships, so its extra difficult to let employees go or shut down a location. These moves are always better taken early, at the first signs of a downturn rather than later when it’s too late. The action may make the difference in your business folding or succeeding.
They most important thing about business is to stay in it. Take some recession-proofing measures, save for that rainy day – if it doesn’t happen you will be that far ahead!