Tips for Small Businesses to Survive the Downturn

Posted on December 29, 2008
Filed Under Sustainability in a Downturn, Tips for Success |

Many small businesses are concerned entering 2009. Are they going to survive? Will they be able to attract new business? Will their current business remain steady?

Now more than ever, it is important for small businesses to go back to their roots, and focus on their core competencies and messaging. As one of my favorite local entrepreneurs once said to me, “run lean and mean” during difficult economic times.

Also, outsource what you can and don’t try to keep all of your processes in-house. It will just suck up valuable time and resources that you can’t afford to deal with right now. You need to be focusing on growing your business and strengthening client relationships! (Click here for more information on strategic outsourcing)

I have been doing a lot of reading online concerning what other business experts are recommending for small businesses in this uncertain season. Here are some interesting points:

Use Your Peer Network for Advice

From the LA Times: “Small Business Owners Need Advice Network”

“This is no time to be a lone wolf entrepreneur, struggling to figure out the economy all by yourself. Seek answers from a support network of colleagues or employees who meet regularly.

“Because we’re in uncharted waters, business owners are getting frozen, and sometimes they stop doing anything,” said Jason Zickerman, chief executive of the Alternative Board in Denver. The firm creates and facilitates peer advisory boards where entrepreneurs share expertise.

“Sharing ideas with other small-business owners can be reassuring, but meetings shouldn’t be gripe fests or hand-holding exercises. Seek out a group — formal or informal — that emphasizes strategic thinking, creativity and long-term planning.”

The article goes on to reinforce the importance of strategic, focused marketing instead of broad, less focused campaigns, as well as the importance of online advertising.

Maintain Cash Flow

This may seem like a no-brainer, but now is not the time for needless capital expenditures. Spend on what you need to grow, and keep track of your ROI. If you don’t need it, don’t do it right now.

From Newsday.com: “Maintaining cash flow a key to sustaining business”

“In today’s tight economy, nothing will kill a business quicker than insufficient cash flow.

“As financing becomes harder to come by, it’s more imperative than ever that small businesses maintain enough liquidity to weather hard times, say experts.

“This requires instituting tighter cash flow management and inventory controls to get a better handle on moneycoming in and out of the business and increase its chance of survival.”

More to come over the next several weeks - Dave

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