What should a Small Business owner be doing in today’s Economy?
The economic conditions are tough but the problems faced by all types of businesses are the same as they were before. It is time to retool some of your programs to help your team take advantage of opportunities thrown by the flip side of downturn.
A recession does bring woes for many people but it also provides opportunities, once every 7 years or so, to those who remain calm, don’t panic and think strategically. Dare to take calculated risks to acquire what your competitor is having now.
Convert problems into opportunities. For example, if your supplier commits breach of contract, renegotiate long haul terms favourable to your business. You must act wisely and be frugal, instead of spending recession period cowering in fear and later regretting on missing out a rare opportunity for growth of business.
You will find large number of small business entrepreneurs investing in expansion and growth, exploring new venture launches or making smart moves to overtake competition when economy improves. It is the small businesses which have driven the recovery every time during recession.
You basically need to focus your attention and put efforts in two areas.
First, take steps to change your routine and stop getting bogged down with urgencies. Work on your business and not in it. Plan actions for future to position your business for recovery in advance. As the leader, spend your time and energy in aligning your team to focus on those goals that will be advantageous for business in long run.
Second, think of buying another company. There had never been such favourable conditions for taking this bold initiative. Small businesses have grown into large companies by acquiring other firms. Now is the right time to do it.
Prudent small business entrepreneurs need to believe that “cash is life” and chart their course of action accordingly. They should accord top priority to cash flow improvements in good times and more specifically in turbulent period.
Owners must recognize massive deleveraging of capital in the business despite interest rate bargains in the current situation. Capital will be much dearer in the long term and would force even well-run businesses in spending only on most robust projects that will not exceed their projected capital cost.
Small business owners must be cautious with opportunities that may come through government’s subsidies or tax incentives. Many of these would be short-lived for the business to justify.