Small businesses, for the most part, are on a strict budget and do not have a lot of expendable capital. Smart tactics one can adopt to wait out and survive the severe downturn cycle in the economy:
- Rethink Existing Business Model: The business model followed during stable or growing economy might not bear the burden of the financial crunch. Check out how you can make the business model leaner. That means cutting out the extra flab and making the business compact and better able to survive the rough tide. A part time CFO/Controller can help you help you overhaul your business model
- Never Alienate Customers: There is obvious liquidity crisis and budgets are on tight leash. This is actually not the right time to reduce marketing budget drastically. Sit down and plan the areas wherein you can control cost which will not have negative impact on existing customer or for finding new prospects. Your survival depends on steady stream of customers. Shifting from traditional marketing to outsourced internet marketing can probably help your save costs.
- Focus More on Revenue Generation Tasks: Try 80:20 principal for your business. Spare 80% of your resources for core revenue generation and outsource bookkeeping, accounting, tax, repetitive SEO work, email marketing work, website tweaking and maintenance etc. Outsource back office support that does not require on hand presence. Time saved will equal to more time for revenue generation tasks.
- Increase Business Cash Flow: Get your billing cycles tighter by timely collections. For this bookkeeping and accounting statements needs to be clear and in order. A professional bookkeeping and accounting vendor can help you get your billing cycles in place by sending statements well in advance and making collections procedure smooth.
- Keep Positive Attitude: Economy runs in a cycle. So after this downturn, economy will stabilize and it will have start climbing up. The time gap is uncertain. Small business owners need to keep a positive attitude get disciplined and flexible to manage the downturn.
Entrepreneurs must understand markets in order to fashion business plans and strategies that can be effectively implemented as per the current environment. You will feel more empowered once your business survives and continues to grow beyond this phase.