The economy right now is headed downhill.
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Although the recession is not expected to be excessively severe, it is expected to be long enough to cause troubles. During tough times, businesses often get discouraged that they cannot compete. Sometimes small businesses think that their larger competitors are better suited to deal with the changing times and have better capital reserves to weather hardship.
That is not always true.
Small businesses have the great advantage of being just that, small! Entrepreneurs, by nature, are able to extend and change their business with ease simply because of their skill set and nature. Flexibility is imperative when dealing with changing times. There are several things that you, as a small business owner, can do to change the face of your business and be better positioned to operate during an economic downturn.
Sometimes a business model needs to be reviewed and reassessed. This can happen at any time, but at no time is it more important than during a time of economic hardship.
Look at the model that your business currently uses. Is it efficient? Does it serve the customer in the best fashion? Oftentimes, the model becomes outdated as your company either changes focus or grows their business. Expanding a business may require a new perspective from the business model angle.
A simple reassessment can oftentimes lead to increased efficiency and revenue.
An entrepreneur once said that if he had only one more dollar to spend on his business, he would spend it on marketing. This holds true for times of hardship. Marketing is arguably even more important during these times.
People still need products, but there is more competition from substitute products. Elasticity spikes because people are willing to switch or stop consuming due to small changes in price. Marketing can help combat these effects by reminding consumers of their favorite products and why they prefer them in the first place.
Remember, it may seem like a lost cost, but if you stop marketing, the effects may hit you some time down the road. Then, it is even more difficult to operate in a tough economy.
Cut the Fat
No one likes a butcher. They're big, dirty and carry a sharp knife.
However, in terms of corporate structure, sometimes things need to go. It might be nice to have front row tickets to every Cubs or Cardinals game, but it may not be crucial to your corporate directive. Cutting the excess fat out of a company is imperative to operating in a tough economy. Another one of my articles focuses exclusively on streamlining operations and becoming more efficient.
Search for Positives
Remember, there is always a light at the end of the tunnel. Find positives for your employees and remember the important of encouragement and motivation. Keep them involved and let them know that it is a crucial period for the business.
Since employees are usually more invested emotionally in a small business than a large corporation, they may be able to find a little extra effort buried somewhere and put it to use. Once your business survives a recession, they feel like they're ready for anything. Their performance during good economic times will increase because of their struggles through poor times. This is a positive for your business and employees, and should not be overlooked.