Recession or economic slowdown. Whatever you call it, it’s a timely topic of discussion. We’ve covered it several times here already at Small Business Trends — here are just a few of the more popular articles:
Whip the Recession into Submission
Franchise Industry Feeling The US Economic Slowdown – Part Of a Cycle
Four Mistakes Entrepreneurs Make in a Recession
Now we also have a radio show with tips for how to not only survive, but thrive during slow economic times.
David Rudofsky, Founder of Rudofsky Associates shared some recession survival tips and some valuable insights in a recent Small Business Trends Radio episode.
Here is a brief overview of just a few of the topics discussed:
- An Internet presence is crucial — as Internet sales are likely to see a significant increase due to rising fuel costs and a desire by consumers to consolidate excess travel spending.
- Grow your business through acquisition — because a recession is a good time to acquire property and assets at very reasonable prices. Your investment is likely to increase and your business can benefit from the growth and expansion.
- Consider taking your business global — because small businesses can receive assistance from the U.S. government to expand into foreign countries. David says, “With the weakness of the dollar, now is the opportune time.”
David is in his fifth year advising small businesses on financial strategy and he shares many of his tips and survival insights.
To hear David’s interview about recession survival strategies, click the arrow below:[display_podcast]
Small Business Trends Radio is sponsored by: JumpUp.com and Infusionsoft
During times of economic strife I think it’s also increasingly important for businesses to keep very up-to-date on their surroundings. When external forces are changing rapidly, and affecting your business, you’ll want to know what those changes are as soon as possible. This includes knowing about the state of an industry, the mindset of customers, and keeping an eye on the general direction of the economy as a whole. We recently put up a guide to this kind of research in the retail industry over at our blog, if anyone is interested. http://blog.hillsearch.org/index.cfm/2008/6/6/How-research-can-get-retail-through-a-recession)
B Smith @ Wealth and Wisdom
Economic slowdowns can bring either hardship or opportunity. If you chose to be open to ideas and look for ways to improve your contribution you will prosper. Note: this requires you to focus on your customer, their needs, and how well you service them.
David stresses the importance of remaining “close” with your customers. That means paying attention to their needs and your service as stated by B Smith above. David even mentions going as far as retailoring things to meet customer needs. Offer smaller (cheaper and affordable) products or services, offer credit that is tailored to the customers needs, etc. Now is a good time to ask your customer, “Really. . .what can I DO for you?” Be proactive about it and start ensuring your survival by giving your customers EXACTLY what they need and want right now.
Yes, these are good ideas. But, this is an inflationary recession, which is very different from the last two recessions. Therefore, the strategy needs to be different, although I can’t argue with staying close to your customers.
Inflation caused low margin products to become losing investments, as expences increase they reduce low margins to negative margins. In a high inflation economy, businesses drop their low margin products and focus on their high margin products. They cut back on new product development as it becomes more profitable to put cash in the bank at high interest rates. Marketing departments are cut back and accounting departments are expanded as cash-flow management becomes the critical business function.
Tom At The Home Business Archive
Very good post.I
This is a very timely post for many.
Leverage the internet to help your business!
All very good and thought provoking articles. I do believe people will be turning to the internet to make a few extra bucks. However, if you are selling products that aren’t a necessity; nothing you do will help your sales. People can only afford what they absolutely need.
here is a software where you can learn to create an effective text ad.
It Improves Profitability Using Statistical Analysis To Mathematically Study Profitable AdsIt was called glyphius.
Thanks for the great post – internet presence – that’s what important right now, IMO. Acquisition is great, given you have the needed funding to acquire businesses.
We’re not great, we don’t have many of the things as some of your more robust sites have but we do have a mission:
One Recession Survival Strategies for Business can be, direct your Small Businesses towards GRANTS and other funding sources. Banks are great for those who can be ‘AFFORDED BY THEM’ however… well, check out uQQn.com. We are growing uQQn.com very (painfully) slow, with one mission… We aim to be of help to SMALL MERCHANTS and the VENDORS who support them.
You have to be in close contact both with you customers and your suppliers. Think the whole picture, i.e., the supply chain, from raw materials to end customer.
Leveraging the internet is the most immediate and most easily do-able of the recommendations.
But so is dealing with unnecessary costs and tightening the spending. One excellent area to examine is in the area of third-party relationships: are your vendor relationships costing you too much time and money?
Thanks for posting the interview. Good stuff.
I’d recommend editing it down into parts though. Not everyone has the time to consume 26 minute podcasts, whereas bite-size 5 minute pieces go down like candy.
how do you survive if you are a small business. I offer early bird menus, specials and also coupons. I have a websie and also emial blast. I am now working a partime job just to survive. What happens when you have nomore working capitial and you do not want to put anymore on a credit card.
Good comments, positive ideas. As a retail florist I am feeling the recession due to Corporate accounts downsizing and cutting back on parties and congratulatory floral gifts for employees. Delivery service has cost me a bundle with gas prices. Have had to cut jobs to a part timer, a driver and myself. Even though flowers are a inexpensive luxury, they are a luxury nonetheless. I’ve lowered prices, and diversified my offerings. However, so far not much is working. The Big Box stores are tough competition since they also carry plants and flowers. Alas, if anyone has suggestions send them on.
Laura, know where you are at and it is soooooo difficult. I try not to let it affect meon a personal level. Hang in there
The Best way to beat the recession is to hunker-down and become a lean, low-cost, highly competitive company.
The Great American Small Business Challenge is a new, non-profit, national business competition that provides small companies with access to free software, training and support. The Challenge is like the Malcolm Baldrige Award, but right-sized for smaller businesses. The target audience are high-impact and high-potential companies who lack the organizational infrastructure they need to break-through. The Challenge is the right medicine for these difficult economic times where small companies need to learn how to get lean to stay competitive and survive.
Winners and losers: Many big companies are losing market share to small rivals. So, there are many losers and some winners in the boom and bust cycles. Many people in the business world are concerned about doom and gloom, ground realities, insolvency and bankruptcy in turbulent local and global markets. Even top lawyers, accountants, market analysts and auditors are already fired and facing long-term unemployment. There are no short-cuts for sustainable success and prosperity. Businesses need bespoke survival strategies to reduce losses, improve efficiency, increase revenue, gain sustainable competitive advantage and outperform market competition. The strategies would help create new business opportunities and job. Many investors target niche or captive markets where consumer demand still continues to grow by over ten percent annually to 2030. http://www.FixyaExperts.com
I came across this article and although it was published in 2008, it is still timely today. Expanding your business across channels is crucial. Word of mouth may be the best advertisement, but now people talk about our businesses across so many channels. Relationship marketing and channel development are crucial to success.