How You Can Flourish During a Recession

Written by Chris on December 1, 2008 – 12:00 pm -

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A lot has been written lately about the current financial crisis and small business. Most of it has dealt with cutting costs and staying afloat, and generally addressing the larger issue of “surviving” the current crisis. While entrepreneurs can survive a recession, there’s no reason not to grow your business, even when money is tight. Here are some ways you can outsmart the competition and not only survive, but flourish during a recession.

Marketing
Most businesses cut back on marketing when times are tough, in an attempt to cut costs and stay afloat. Study after study has proven, however, that the businesses that succeed and grow the most after a recession is over are those who kept on marketing during the bad times. I’m not telling you to spend all your cash on marketing and hope for the best, but don’t cut back on your marketing just because there’s a recession. If anything, use the recession as an excuse to make every dollar count and negotiate better rates with Magazines, Printers and other sources.

Upselling
If you already have existing customers, a great way to bring in extra cash and hone your sales skills is to try and upsell them to a higher level of service, a more expensive product, or a  value added service.
For example, if you do landscaping during the summer, you could upsell a yearlong gardening service or your snow plowing service for the coming winter.  Call past customers up and offer them a member’s only deal or coupon to get them to purchase a new service or product. Try and develop services or products that require a repeat/monthly investment as well.

Efficiency
Making every penny count can be a good thing.  Take the time now to create processes, train employees and systemize your business so that runs like clockwork. The time spent in creating efficiency now will result in the ability to take on more customers and clients with the same system you already have, increasing your profits while not increasing your costs.

Lower Costs
Finally, use the downturn as an excuse to play hardball. Tighten the screws on your vendors and suppliers. For example, call your cell phone provider up and threaten to leave unless they give you a better deal. Tell your suppliers that they need to lower their prices or you will find someone else to deal with.  When they complain, simply explain to them that times are tight and everyone is making cuts in spending. They’ll understand and you’ll have more money to spend on marketing.

This guest post comes from Maya Richard, who writes reviews about cell phones. She can be reached at mayarichard [at] gmail with feedback.

Tags: Bootstrapping, cost cutting, Marketing, recession, upselling
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7 Reasons Small Businesses Survive Downturns

Written by Sophie Marston on October 13, 2008 – 12:00 pm -

Not really a great time in the economy at the moment is it? I beg to differ. Big businesses that people thought were solid turned out to be pretty weak at the foundations. I think what we need in these times, is more small business. Small business is (in my opinion) the basis for a strong economy. These are the companies that have the ability to survive. The big companies were good in the good times, but they had piles of corporate debt, demotivated employees who were worried about losing their job, but small businesses aren’t like that. Here’s why:

Bootstrapped

Remember when you first started your business? Remember all those times when you worked out of the basement and really had no money so you just did the best you could? Well, you’ve been there once, you’ll do it again. Maybe you’re still bootstrapping though, not because you need to, because you WANT to.

Creative

Small business owners at some of the most creative people around. What happened last time you had a problem? You had a good long think about it, you looked at possible solutions and you thought some more. Then it hit you. You solved the problem and moved on. What would a big company have done? Probably spent one million on a consultant, and a few months on reached the same conclusion. You’ve done it since the start of your business and you’ll keep coming up with new and original ideas.

Passionate

There is a reason you get up early everyday and work ridiculously late into the night. The reason? you’re passionate! You love doing what you do, and that means that your work is the best it could be and your clients are happy (usually). You’d do anything to keep your business alive and growing.

Careful

During you business’ lifetime, you have been careful. Where’s the work for client X? It’s in a folder on your desk. You don’t loose your client’s work, you know where everything is and what is happening at any point during the day. You didn’t take stupid risks with your money, and people can see that. you didn’t pile up debt.  Your clients trust you. You’re careful in every way possible. If you’re not, it isn’t just you at risk, it is your clients, and that matters to you (well it should matter).

You know your industry and business

If someone asks you to get you product X, you can do it, if someone asks you to design logo B, it’s done, if someone needs help setting up Y, you’re there. People in your industry (however big or small it is) know you can be trusted to do the right thing. You know the ins and outs of the industry and you also know how your business fits into it. Are you at the forefront? Maybe you are the company making things work at the back end? For any type of business, from eBay power seller to the next Silicon Valley start up, the industry and you relationship is crucial.

You know your clients

and they know you! The client-business relationship is crucial whatever business you’re in. If you are in a service business, then you need people to pay bills on time and to trust you and your judgment. If you sell products from your online store, then you need to know you can count on return visits and word of mouth. Your clients are your business and you have good clients.

You know your next step

Within a big business, knowing where you are going is hard. However, for the small company, you know where you want your business to go. You know which markets you want to penetrate, which products you want to sell, how many newsletter subscribers you need. With a clear plan, you can adjust your strategy accordingly.

So there you go! 7 reasons why you and your small business are perfectly poised to whether any kind of economics condition. Also, you are less likely to have copy cats/opposition in these conditions, so you can really stand out from the crowd. You might also want to check out this post by The Toilet Paper Entrepreneur about why now is the best time to start a business. What do you think?

Sophie

Tags: Bootstrapping, Economy, Entrepreneurship, small business
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