It’s no secret that the U.S. economy is in trouble and a lot of small businesses are in danger. What can they do to get through these uncertain times? Here are a few ideas:
» Continue to advertise. The first thing most small businesses do when sales are slow is to cancel their advertising. Wrong!
» Do some creative marketing. Think about it. Are there any other markets out there that you can sell to? Are there any other ways you can contact potential customers you may be missing now?
» Make every sale count. Once you get a prospect in your store (or on the phone or on your Web site) make sure you convert him into a sale.
» Take the time now to train (or re-train) your salespeople to be sure they are totally familiar with your product line or services capability. Teach them to never say no.
» Take the time now to do some of those jobs you’ve been promising you’ll get to “one of these days when we have the time.” Fix that creaky machine, clean up those old files, contact “dead” customers, repaint that sign, pull the weeds in the parking lot — you know what I’m talking about.
» Increase your employees’ efficiency. Eliminate the “dead wood” — you can’t afford them now.
» Expand your product depth to cover all price levels. “Can’t afford the Platinum version? That’s OK, we have the less expensive Gold, Silver or Bronze version.”
» Re-negotiate. That includes your rent, existing contracts for products or supplies, payment terms, advertising rates, pay rates. Remember, everything is negotiable.
» Accelerate your accounts receivable. Offer 10-day discounts to encourage earlier payment.
» Pay your bills using a credit card. This will give you an extra 30 days plus you may get air miles or other rebates. Just be sure you pay off the card every month or you’ll be worse off than before.
» Consider factoring your receivables. It will cost you some points but it will help keep you afloat.
» Reduce your inventory — especially old, slow-moving stock. Sell it at a discount if you must.
» Get your suppliers to maintain a “safety stock” of the products you buy from them so you can reduce the size of your inventory. (This is the idea behind “just-in-time” deliveries.)
» Plug all the “leaks” in your business. Every business has those leaks like the cost of an idling machine, lights on in unused offices, paying a little too much for routine supplies, etc. When sales are brisk, they are less important; when sales are slow, they can “sink” a small business.
» Buy locally whenever possible. A recent study revealed that for every $100 spent at a local business, about $40 is returned to the local economy. For every $100 spent at a “big box” store, only about $18 goes to the local economy and I suspect that if that same $100 is spent on the Internet, only about $5 goes to the local economy. Help your neighbor businesses to survive and get them to help you.
» Shop on the Internet and then give your local business a chance to meet the Internet price. They will make a few dollars less but that’s better than no sale at all.
» Consider forming a board of advisers for your company. A small group of experts in fields in which you have little knowledge (taxes, employee relations, legal, marketing, etc, etc.) can open you to new opportunities that you would never have thought of.
» Lastly and perhaps most important — hang in there. If you can make it through these tough times, some of your weaker competitors will be gone and you will have greater market share when we get through this.
We’ve all heard the admonition — “Don’t sweat the small stuff.” Sorry, but this is the time to sweat the small stuff.
— Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He is not in the advertising business but he is a small business counselor with the Santa Barbara chapter of the Service Corps of Retired Executives (SCORE).