Expertise On Demand
28 Feb 2009, 11:59PM PT
25 Feb 2009, 5:30PM PT
Closed: 28 Feb 2009, 11:59PM PT
Earn up to $200 for Insights on this case.
Continuing from our earlier cases, American Express is sponsoring more conversations here in the Insight Community concerning how small businesses can handle the current economic environment. Contributions to our past discussions have made their way to American Express' OPEN Forum blog, and we're looking for further insights that will complement the topics on the economy section of the OPEN Forum blog.
Recent news stories have painted a grim picture of the state of the economy, but dwelling on the negatives isn't likely to help the economy. Do you know examples of small businesses that are adapting and also keeping employee morale high? Do you know of any small businesses that are actually faring better in our current economic crisis? Do you have practical advice on how a small business can manage this recession? We're looking for optimistic insights to offset the pervasive gloom, but we don't want to sugar-coat reality. Our goal is simply to highlight small business practices that might help owners and managers. Additionally, the insights from this case could also inspire future topics and cases for American Express' OPEN Forum.
This case ends soon, so please try to submit early. Any insight that is selected to be published on the American Express OpenForum blog will be awarded a payment. You may submit multiple insights, but make each submission a post that can stand alone.
Now's the time.. by Rob Enders
Wednesday, February 25th, 2009 @ 6:28PM
I have often heard that the best time for investing in small business, expanding a company or developing opportunities is when times are tough.
In my town, we are hearing the 'bad' news daily. Our manufacturer's are laying off people left, right and center.
But, interestingly, there are a number of good news stories coming out as well.. I recently heard about a local propane supply company that received a national 'One of the best places to work' awards. Our main street retail sector is growing. A new diner just opened. The munipality was awarded a grant to upgrade our sewer system. Great news for the contractors in town.
My company is using this period to expand. We are actively looking for similar businesses to acquire. We fully expect to run with low margins for the near term but these acquitions will position us to quickly grow when the economy starts to grow again.
Now is a good time to draw on your network relationships. Partnering on projects can lead to new opportunities.
I hope these thoughts are helpful.
Good luck everyone.
Consider it a great time to bargain shop. by skepticalcynic
Thursday, February 26th, 2009 @ 7:21AM
When the times are as hard as they are it offers opportunities. Small businesses can get those things that need cheaper because other businesses are doing anything to keep their sales up.
As a small business you need to look at renegotiating everything from your lease on office space or retail space to the float you can earn with your suppliers. Look to bargains you might be able to get by switching to a new supplier of any product or service you use. They are going to be eager to get your business or keep it.
Never are you going to find a better time than now to cut your costs than right now. And you can do it without giving up anything.
In my business we have seen our business change little as we provide IT services to small businesses. As money gets tight at our clients they seek to shrink what they spent on new equipment but are more willing to use us to maintain what they already have.
Optimism for small businesses by Gene Cavanaugh
Thursday, February 26th, 2009 @ 9:13AM
I think the worst part of starting a small business is in finding the right kind of employees and clients, and in gaining the right kind of services. In boom times, this can be almost impossible for a startup, and difficult for struggling small businesses. Jobs and opportunities exist at "established" companies; why would the people you need, or the services you must have, seek you out, or even be willing to deal with you?
In the present economy, it is a totally different matter. It may be hard to find the right customers/clients, but getting your business in shape to meet the challenges becomes a far lesser problem, and, while it is always crucial to get it right, you have that opportunity to a far greater extent when you don't have to compete with the "safe" established businesses for employees and services - in fact, YOU become the "safe" haven!
Creative Software to save money. by Chris Webb
Thursday, February 26th, 2009 @ 3:46PM
I work for a small software and IT company that sells software to Kart Racing facilities around the world. I've noticed in this current world-wide slump that we've not only seen our product not take a hit, but we've actually seen some upturn.
Our product is marketed to facility owners that are currently paying for timing, POS, financial, inventory, HR and timeclock software and hardware from differing companies. We see a great potential in consolidating all of these things and can offer really great savings to our customers. With us, they only purchase one software license to run their entire company and can get better prices on their hardware as only 1 person is making a margin on it.
When the economy is tough like it is today, I wholeheartedly believe there are more opportunities than when everything is going great. Business owners are taking deep looks into their processes and effeciency in what they are spending their money on, and if you can offer them a product that can consolidate and hopefully save them money its almost a no brainer.
Innovation in tough times by Lucciana Costa
Thursday, February 26th, 2009 @ 6:05PM
My dad runs an indepedent construction management company in Ann Arbor, Michigan. Michigan is having a very tough time of it these days, but his company is doing well. He has been working on branching his company into different areas. Normally he does a lot of work for Coca-Cola, but as they have also been hit hard, he's decided to take some of his experience there and apply it elsewhere. Coca-Cola originally hired him to build security and cash rooms in various plants in the regional midwest, but along the way he picked up some contacts in the security field. Now he's teaming up with a local security camera business for a series of projects, so two local businesses are profiting.
Also, he has hired someone, and rented space in a building in Louisville, KY to expand his central locations. As a result of smart buisiness planning a few years back, he has built steady work in mulitple states around the midwest, so all of his clientle aren't located in one area.
Lastly, and most importantly, he is very responsible, efficient and pleastant to work with, and always has been. A few clients have told him things like: "Things have been tough lately, but we couldn't think about working without you, because no one could do the job like you can."
So most of my insight comes from this example, because I think he is creating a really good prototype for a small business dealing with the economic downturn. He is taking the opportunity (and slight risk, but one worth taking) to expand into different areas. It's like building legs on a table; if a table has two legs and you take away one, it will fall over. But if it has four legs, taking one away will only make it a bit lopsided. Also, I think the most important thing anyone can do for their business is to make sure you have something unique to offer clients or customers. Why should you be the company that people will always want to return to? If you can develop that area alone, you will have a much brighter future. A local recording studio I work at is following much of this example as well, moving into working with TV and licensing and attending conferences to attract new clients. They are also the kind of place people are loyal to (I can personally attest to this!). Part of anyone's product is the experience it provides. Focus on this, and you'll have a unique perspective that will undoubtedly enhance your business.
Small businesses are in a very unique position right now. They have the ability to be flexible, and make changes they need to make, whether it be expanding into new areas or securing great customer relationships. Now is a very good time to take that risk. Most likely, there are many others doing the same thing, and working together is beneficial for everyone.
Siezing the opportunity of an economic downturn by Tim Marman
Friday, February 27th, 2009 @ 5:25AM
I am the founder and owner of a technical startup in New York City. Despite the grim news, I firmly believe that small business will lead us out of the hard times.
While small businesses may not have the same resources that a larger organization has, we have have one key asset that will prove move valuable than anything else: the ability to be be nimble. I believe this makes us well positioned to weather the downturn and in fact emerge stronger.
Another advantage we have under the circumstances is that technical startups typically rely on sales of equity as opposed to operating with significant debt. As the credit markets also tighten, this levels the playing field somewhat. Larger organizations can be hard to compete with when they are spending freely, but as they cut back on that spending and have less debt financing available to them, it really enables us to compete with "the big boys" easier.
As a technical company, our largest cost by far is talent. Here in New York City, we're seeing many larger business - particularly those hard hit in the financial services industry - significantly cutting their workstaff. All of a sudden, elite talent is available and often for well below what they once made. We've gotten an amazing number of highly qualified resumes, with many willing to work for more equity and lower salaries. We've even had a few applicants willing to work for only equiy and health insurance.
Finally, the economic downturn is making both individuals and other business more price sensitive. This opens up a great opportunity to compete with a cheaper, lighterweight product. When times are good, potential customers may be looking for the "best", regardless of price - but we have found them more receptive to our sales pitch for a product that does 80% of what the market leader does for a fraction of the cost.
Ultimately, small businesses should see the grim economy as a unique opportunity to sieze marketshare - one that may not exist when larger organizations are freely spending and putting their more significant resources to work. There is, in my mind, no better time to start (or grow) a small business.
Strategic Research Wins Every Time by Devin Moore
Friday, February 27th, 2009 @ 6:56AM
Super Short Summary
Businesses of any size that employ proactive strategic research into the state of the market will discover sufficient opportunities to stay afloat.
Charge Enough for Your Services
Years ago, I heard a talk from one of the wealthiest businessmen in Japan. He stated in no uncertain terms to make sure you are charging enough for your products and services. I wholeheartedly agree. Putting forward unrealistic discounts will only hurt your bottom line by among other reasons, deflating the perception of your products' value. There's a reason you don't see big obnoxious "50% off sale!" signs at Rolls Royce dealers. Make sure any discount you offer respects your repeat business, and is in conjunction with a long term, profit-earning strategy.
Measuring is Free
I agree that the state of the economy looks grim. However, the economy is not entirely dead, and in fact certain unexpected industries limited to a particular locality may be enjoying success where nationally the average business in that same industry is still stuck in a downturn. I recommend deference to forethought and research.
What are people buying in your neighborhood?
This is easy to solve, just go to the mall and watch which stores' bags are leaving the mall.
What are people not buying, and why are they not buying it?
Despite massive sales and markdowns, some businesses cannot unload their products. In some cases, these businesses might be having even more trouble in a better economy. Their competition may be equally underserviced by consumers right now, but they might be ignorant to larger mistakes that are costing them whatever precious few sales they would be earning. Be sure that your business is not losing sales for those reasons. An example would be inferior customer service... I know we can all think of a few chain stores that have gone bankrupt lately that had infamously bad service. Those stores were doomed eventually, and the economic downturn just accelerated what I and many others assumed would happen at some point.
Who are your friends in business?
My art business enjoys continued success due to my incessant networking to other businesses that are interested in displaying my works. I am not too concerned with selling works in this market, but spreading positive word of mouth about how easy I am to work with will mean more income from those partner businesses later. I urge businesses to explore swapping rewards with other businesses. My dad tells the story of being able to take a movie ticket in for a free ice cream or comic book during the depression. These synergies helped businesses survive the worst economic downturn in history.
Could you do business overseas?
To some people, overseas business seems like an impossible stretch for their business model. However, thanks to the internet and various other online services, selling goods overseas may be a possibility for those who want to try different things. I have sold copies of my book as far away as Finland. I encourage readers to seek out foreign businesses online and see what they are doing, and what you might be able to learn about selling your products and services overseas. The tax implications are complicated, but it's better to be paying complicated taxes then to be paying NO taxes because you have no sales!
The Other Side of the Coin by Joshua Howe
Friday, February 27th, 2009 @ 10:34AM
Lean times have put many small businesses on the defense finding ways to survive this down economy. While surviving the difficult times is foremost on a business’ agenda, thriving now, and planning for the future should be high on that list. "The best offense is a good defense" but, defense doesn’t allow you to score. There are opportunities created by the slumping economy and it is the savvy business owner that will turn over that coin and find the opportunity in the problems.
Advertising: A business may be able to survive for a while by cutting their advertising, however not forever. The trick will be to get the same or more advertising for less money. Those selling advertising are struggling in this economy too. White space is worth nothing empty. Capitalize on their need to fill their advertising space. Tim Ferris, author of the Four Hour Work Week, recently had an excellent article “How to Get $250,000 of Advertising for $10,000." While your budget may not be near as large, the techniques he talks about will help maximize your advertizing budget and exposure. Your business potentially may be able to get the advertising space you had before the recession at better rates. If your budget allows, contract your advertizing space in advance; prices will likely go back up as the economy recovers.
Getting Trim: Businesses have had to make difficult decisions to remain solvent in a declining economy. This has meant eliminating waste, reducing inventory, curtailing credit funded growth, and relying more on cash because of declining credit lines. When is stopping waste, working within your means and growing as capital allows a bad thing? Never! The heart attack patient knew that they were 40 pounds over weight before they ended up in the ER, they just never did anything about it. Businesses knew that they needed to make changes before this crisis and they avoided it. Now businesses are being forced to make the decisions which are good for the business’ survival now, and growth going forward. Don't fear the changes, embrace the new trim way of working and instill it in the culture of your small business
Employees: While staffing may be an area to trim, it can also be an area that a business can enhance in this economy. There are a variety of skilled professionals and freelancers looking for work. Whether it's employing someone regularly or a contractor, talent is cheaper than ever. Is there a project that you have been delaying due to the high cost of the technical skills needed to complete it. Employees and freelancers may be willing to accept less for the security of a six month contract. Pursue those contracts as capital becomes available, perhaps on the revenue you saved on advertizing.
The bad economic times have requried small businesses to evaluate how they are doing business and make serious changes in order to survive. The beauty of the lean times is becoming aware of how much waste we had in the rich times. The changes your business makes now can ensure its survival through the recession, as well as it's growth after the recovery.
End of Capitalism? Heck no, think of this as the *beginning* of a new economic era. by Joseph Hunkins
Friday, February 27th, 2009 @ 6:54PM
The beginning, not the end:
No business can avoid the impacts and influence of a massive global recesssion, but during these challenging times it is very important to keep in mind that the problems have followed a long period of success. More importantly there are several good reasons to believe the not-too-distant future will bring us another era of relative prosperity. The USA remains the clear key global economic driver and small businesses are a cornerstone of our economy. Also, whether you favor the stimulus plan or not, that level of massive spending will at least help bring short term benefits to our economy. Since the massive stimulus is now a done deal, small businesses need to worry about the long term consequences of that decision later and in the short term just get down to business.
So what are a couple practical suggestions to implement when you find yourself singing some bad business blues?
As Thomas Edison was fond of saying "There is a better way. Find it". Sharpen the pencil and find the free money that lies inside the expense items of every small businesses. A few quick check suggestions:
1) Check your ISP and Server needs: Thanks to cloud computing you may be able to move internal computing out to the internet for some cost savings. Generally internal email systems are no longer needed and you can outsource them to free accounts at Google, Microsoft, or Yahoo. Check to make sure your ISP expenses are in line with your needs. Are you hosting your own websites on your local server? Although some businesses still need internal networks, you may be surprised by how much you can do with a remote hosting plan and cloud services at a cost of under $25 monthly. There are almost *no* small business websites that can't be run remotely at far less cost than a local server, and remote hosting offers 24/7 support and high uptime. Shopping cart routines you can add to a website or features like 'Yahoo Stores' are often more cost effective than managing your own internal network and server. Google document functions are robust and for many small businesses offer all they'll need for remote collaboration. For more functionality consider ZOHO, also free to cheap and very powerful.
2) Take this chance to experiment with new media and a social media strategy.
Very, very few small businesses are fully leveraging the power of social networking in their marketing strategy despite the fact this is one of the most cost effective ways to stretch your marketing dollars and almost as importantly improve your and your employees relationship to your customers. To get the ball rolling I'd suggest taking a few hours to set up a blog about your business where you or an employee whos is fond of writing will post short articles about your market niche. Successful blogs need not be written by an Ernest Hemmingway - in fact a *sincere* and knowledgeable voice is generally what your customers will like. Twitter is rising very, very fast as the new social network of choice and it takes less than a few minutes to launch a Twitter account. Using Twitter search to find subjects and people who are in your niched. Follow a few hundred people to start but consider increasing this number to gain more followers of your own. As always with social media do not abuse your relationships - post links to your blog and other items of interest to your and your customers, and answer questions in your area of expertise.
Obviously there are many, many more ways to leverage the bad times to create better times for your business. You didn't make it this far in the good times only to throw up your hands in despair as the economy sags. Get to work doing what you do best - running your small business in good times and bad. Challenges are not an end to things, they are a beginning.
Lessons from racing - Your small business can finish first. by John Robertson
Saturday, February 28th, 2009 @ 8:53AM
Out of coincidence with the insight posted by Chriss Webb, I am club level kart and auto racer. Perhaps I've purchased the equipment that his small company produces.
I find my racing experience may serve as an analog to guiding a small business working through these difficult times.
Believe in yourself. Understand what your goals are and set about achieving them. Have confidence, measure your progress, and believe you can achieve them.
Eyes way ahead. Look way down the road and into the future; the perspective is broad, the opportunities clearer, and the hazards are easier to avoid.
Pace yourself for the long run. You first have to finish before you can finish first. Don't crash or wear out your tires on the first lap. Save some resources for use when you'll need them.
Be opportunistic but not reckless. Expect others will make mistakes and be prepared to capitalize upon them. Preparation, patience and proper timing are often the key to making a winning move.
Partner to win. Develop peer networks, learn from others experiences, and work with your employees, suppliers and competitor as a team. In racing, two cars cooperating to draft (e.g., following each other closely) are often faster than an individual car. Use cooperative relationships to bring more power to the table.
Prepare. Plan for every contingency before it’s critical. A thorough inspection a few days before a race prevents problems that take you out of the competition.
Learn from your mistakes and the mistakes of others. Often succeeding is not doing everything right, but less things wrong.
Measure everything, understand and trust your data, manage by fact. Don't let your intuition cloud reality when the facts are screaming otherwise.
Sweat the details. Often improvements are small but add up lap after lap. Have a plan to prioritize what is important, and work the details to obtain and lock in the incremental gains.
Finally ... Relax, have fun, and enjoy the thrill.
Hey, where is the silver lining on my economic storm cloud? by Joseph Hunkins
Saturday, February 28th, 2009 @ 11:49AM
If you feel like the average US small business, you are more optimistic now than in November. The City Business Journals Network conducted a survey, reported here in the San Francisco Business Times, [full survey results here] that interviewed American small businesses and found they were more optimistic in January than in November, but still very concerned about the economy and feeling very cautious about expanding their business anytime soon.
Challenge = Opportunity
Even economic storm clouds have a silver lining, and despite what appear to be some of the USA's worst economic conditions in a generation, there remain many ways for small businesses to capitalize on the opportunities and the advantages that small businesses have over larger, less innovative, and less flexible operations. Here are a few reasons you should be optimistic about your small business future, and use that optimism to seize the new opportunities that great challenges always bring.
First, let's take a look at what the survey found small business owners are planning to do as the immediate economic crisis stabilizes:
39% Buy down credit lines
37% Look for new products and services
34% Increase Capital Reserves
32% Re-assess existing business plan
28% Re-engineer/find less expensive ways to do business
27% Hire new employees
Somewhat optimistically the survey also found that only about 15% of the businesses surveyed felt they'd have to sell out as a result of the economic crisis.
Small Business ... Rules!
Let's take a quick look at a second set of more general reasons small businesses can remain optimistic about their ability to weather the economic storm and come up profiting again:
Real estate values have come back down to earth: Have you been leasing your business space? Renting your own home? Many believe we are beginning to see some of the best real estate deals in decades, and as the government begins to focus on making credit more easily available you should be looking very carefully at how real estate and loans impact your small business. Tax issues can become complicated for those who use a house for both business and living, but in many cases you can now buy homes for costs approaching half of what you would have paid for identical digs just a few years ago. Brand new businesses with young owners who have never owned a home should look into the Federal Government stimulus package benefits for first time home buyers. Details on that program are expected in March 2009.
Big firm layoffs can bring expertise to small firms: Working in the banking or investment sectors? As the huge Wall Street firms consolidate or collapse they have produced tens of thousands of unemployed high-end executives and workers, some of whom might be a great match for a middle sized business that is growing or needs insights into Wall Street or doing business with the federal government.
Federal Government Expansion: The federal government is about to spend more money than at any time in US History, and whatever your philosophical view is about the wisdom of the stimulus plans, your business should be prepared to deal with how this type of spending may affect *your own* economy. If you produce products or services for the health care, transportation, or other infrastructure sectors, make sure you follow how the coming massive spending may impact your business. Can you scale up quickly to meet huge short term demand that could be followed by dry spells? Are decision makers aware of your products and services?
Employees should shine:
Small business can enlist employees as ambassadors of good will easily, and working on this angle can help you separate your loyalists from your slackers. The new business economy will have less wiggle room for uninspired workers to settle into unproductive niches where the paycheck is their only inspiration. If your employees are not reflecting back the respect you show to them, maybe it's time to give somebody else a chance.
If you've got more time on your hands from the contraction of some business, put that nervous energy to work on the company blog, website enhancements, and social media strategies you have been putting off. Blogging and social media does not require specialists, and any small business owner can gain cheap and large expsosure simply by interacting with customers and potential customers online. Need advice? Check into the articles on social media strategy here at the Insight Community for some great recommendations.
Use creative borrowing to get at the cheap loans:
Even as short term bank loans have become harder to get and have run into almost usurious rates, personal home borrowing on equity lines and mortgages is creating some of the cheapest money in a generation for those with good credit. This is likely to continue for some time as Government is dedicated to a massive increase in liquidity and low interest rates. Consider borrowing off your own home at low rates rather than taking out high interest loans - although it's a good idea to consult your tax advisor and/or lawyer about this because this may reduce your business interest deduction or have other legal implications.
The sun always rises on the American dream, and small business remains a bastion of economic strength, hope, innovation, and prosperity. The storm clouds of economic catastrophe are starting to blow past us, and now it's time for small business to shine.
Industry Optimism by Daniel B
Saturday, February 28th, 2009 @ 4:21PM
Change begets opportunity. Given the current economic situation, here are three things that every company should do:
Renegotiate vendor contracts. This is not to say that you should squeeze all profit out of your vendors. Business relations should always be mutually beneficial. However, contracts that were negotiated a few years ago when things looked rosy should be carefully reevaluated. For example, one small business was able to renegotiate their contract with Verizon Business and cut their bill in half.
Foster employee loyalty. Employees are more likely to stay at their jobs now, if they feel the jobs are secure. The good news is it's easier to retain employees. But don't be lulled by this. Unhappy employees being forced to work harder and longer hours will not stick around once the economy turns. Now that employee's expectations are lower, do small things to increase job satisfaction and make people feel appreciated.
Do more for your customers. Much advice centers on how to maintain price discipline and avoid doing work at (or below) cost. There's a different opportunity, however. Given that your customers are likely facing a new environment, they may be open to help in new, adjacent areas. For example, a company that downsized may now be shortstaffed in certain areas and happy to have a vendor provide managed services. Look for these areas, and propose solutions for your customers' problems.
Finally, even though certain industries are struggling, some are doing quite well. At AnythingResearch.com, we track market size and growth of thousands of U.S. industries. What we see is that declines are often fairly minor - perhaps 2-3% from 2007 peak. If yesterday it were 100 degrees outside and now it's only 97 degrees - wouldn't you still say it was a hot day? Same goes for employment. Let's talk about the employment rate rather than the unemployement rate: the temperature has gone from 96 degrees to 92 degrees. Still pretty hot.
Furthermore, industries such as residential property management, have grown even though real estate prices have dropped. Businesses that provide real value (such as property management) still fair well even when stock prices (or real estate prices) plummet.
Finally, some advice a la Benjamin Graham and Warren Buffett - if a company advertised a 50% off sale, would you buy or sell? Now is the time to be buying and investing - things are cheap. It won't stay this way for long...
Reorganizing Myself into Optimism by Anna Knight
Saturday, February 28th, 2009 @ 4:33PM
I am writing from the perspective of my own business, which is rather unique; thus some of what I mention may not seem as if it would apply to most. I feel, however, that even the less generic examples should inspire any entrepeneur to find out how to better explore his or her own market niche.
When our consumer confidence level is high, people are acquiring things more often, and they are more willing to spend money on services. It was under these conditions that I and a partner began a home organizing business a few years ago. Most of our clients were upper-middle class families who wanted to tame the clutter that made their homes less functional, and to be able to easily get to all the tools and toys they purchased, which in an unorganized state tended to hide behind one another. But in the current economic state, I will instead focus my new sole-proprietorship organizing service in a different direction. I see two areas where spending money for my service can save people money in the longer term: helping to incorporate items from storage units back into people's homes; and helping families who are moving into smaller (and more affordable) homes get off on the right foot, be it in packing and/or unpacking. I believe that one of the greatest strengths I offer to my clients is objectivity: humans become attached to the things we own, and I can help them step back and look at what they do and don't need, and subsequently help them systematize what they keep in the space they have to work with. Thus, even though my business doesn't offer a service that is technically necessary, I do believe there is a productive place for it - regardless of the larger economic picture.
I also face the challenge of attracting new business. I am creating brochures emphasizing consolidation to be left at storage unit rental facilities. While at first I wondered if my services might be seen as conflicting with these facilities' interests, I struck up conversations with people who worked at a few, and to my surprise they were strongly in favor of it. It turns out that many facilities have waiting lists. While some people will move their things out of storage to save costs ... others are needing new storage, not least due to moving into smaller homes. Furthermore, these facilities saw a positive outcome in being able to recommend such a service to their clients, because it made them appear more "full-service." Several facilities already had partnered with moving companies for this very purpose.
I also am in the process of updating brochures tailored to the real estate market. Realtors are a great source of leads because they not only know that a family is looking to buy a new home: they also know why. Another way that I have brainstormed finding new leads is to attend Chamber of Commerce networking events, where other small business owners and employees congregate. It turns out that many people who perform other types of work in people's homes have been challenged by cluttered, disorganized houses; my only concern is that I won't have any control over how tactfully my busines card is offered to such a homeowner, but even in light of that lack of control, I'm still getting the word out. In return, I can also hand their business cards out if, in the course of a consultation or job, my client mentions a need for a plumber or electrician or to have new windows installed (for example).
I hope that my examples above can help others get creative in branching out to new niches, or even just maximizing existing ones. Also, whether you're a startup or well-established, you can always get advice from SCORE. These ex-executives have volunteered their time and expertise, and I have had more than one occasion to be grateful for them. And, as our government reacts to our economic downturn, small businesses may benefit from changes in tax and other laws. So, it's a good idea to check the Small Business Adminstration and local government websites on a regular basis. Keep your spirits up, and your eyes open!
Who's Winning? by David Cassel
Saturday, February 28th, 2009 @ 11:52PM
Keep your perspective -- and keep your sense of humor. It's a difficult economy, but it's creating opportunities as well as hardship. When you think about the sudden shift in our economy, remember that it's not universal, and there's some hidden lessons if you study the list of winners.
Even with the economic downturn, here's some businesses that are actually faring better.
This winter NPR actually paid a visit to all the businesses on a town's Main Street -- and found there was one place were business was booming. As the stock market tanked, people with cash on their hands were eager to pick up some blue chip stocks at bargain prices. Not everyone is hurting for cash, and the key to sales may be knowing where to look. Business was booming at a local stock broker's -- who had finally decided to take a break from the extra work, and enjoy a quick fishing vacation.
Vacuum cleaner repairmen.
Cost-conscious consumers would rather repair their old vacuums than buy a new one, reports a friend in Boise who'd visited a local shop. "There were over 20 vacuums parked in the lobby...and she told me that there were much more in the work area." Consumers seemed hungry for a chance to save money wherever they could. His repair woman apologized profusely for the delays, explaining that "No one is buying new vacuums. They're repairing their old ones!"
According to the Washington Post, "Circulation in the last six months of the year rose as much as 23 percent in libraries around the region." It's easy to attract interest if you're offering something for free. And as far away as Iowa, they're reporting exactly the same thing. "The biggest gains in checkouts from 2007 to 2008 were seen in upper elementary/middle school books (23%), audio books (17%) and DVDs (13%)."
"Our business grows when the economy is in recession," shrugs Koki Ando, the CEO of Japan's Nissan Foods. They make the 50-cent cardboard contains of "just add water" noodle soups -- and as priorities shift in difficult times, their sales have started to grow.
Dolly Parton's theme park in Tennessee used to struggle to find workers every summer, sometimes even hiring staffers from Russia. But this year's bad economy has a silver living: there's no shortage of people looking for work. Even for a simple secretarial position, Dollywood has already received 90 applications.
Been to an airport lately? You're one of the few. With people cutting back on air travel, the lines have disappeared for security checkpoints. Old realities are changing, and even during peak days like the Thanksgiving rush -- people are just staying home.
One of the most remarkable stories about the economic downturn comes from the Dubai, the most populous of the seven United Arab Emirates. "[M]any expatriates are abandoning their cars at the airport and fleeing home rather than risk jail for defaulting on loans," reports the Times of London. Police have discovered more than 3,000 cards abandoned outside Dubai's international airport -- and nearly all of them still had their keys in the ignition.
Passing the Bar
Lots of people are losing their jobs, but that's good news if you hate lawyers. One blog tracked massive layoffs by at least eight different law firms, a trend which was also picked up by bloggers at the Wall Street Journal. Even corporations are now carefully scrutinizing their costs, and they've found an easy way to cut budgets. To paraphrase Shakespeare: "The first thing we do, let's fire all the lawyers!"
Finding Small Business Optimism Amid The Pessimism by David Cassel
Saturday, February 28th, 2009 @ 11:58PM
You know who's increased their sales this year? Wal-Mart -- because people are hungry for bargains. There's one big advantage to selling during a recession: you know what people are thinking. Discounts and special pricing plans are more attractive than ever. Plus, there's now $400 more in stimulus money that will be floating around in everyone's checking account. Yes, consumers are hanging on to their cash rather than spending it -- so far. But part of "hanging on to their cash" means spending it on perceived bargains. And sales can be described as proof that you understand your customer's problems -- or a chance for them to take advantage of yours!
Understand the dynamic. In November the Associated Press reported that major credit card companies have started giving less credit to their customers (presumably worried about defaults). If you're trying to unload some expensive inventory, you might want to signal that you're "flexible" on financing to attract new customers -- or help them find new sources of credit.
Remember that we're all in this together. When the state of Ohio solicited suggestions on their web site, they received 11,373 suggestions. This proves that everyone is thinking about the hard economic times, and they'll appreciate any hope that your business can give them. According to Reuters, one resident even had a unique idea for easing the pain: spending $48.6 million to send every adult in the state a six-pack of locally-brewed beer.
Last week newspapers were also full of articles about a new trend: bartering. "[T]he trading of goods or services without using cash...is making a comeback in a troubled economy," wrote the Associated Press. (And a spokesperson for Craiglist tells USA Today that bartering ads have doubled in the last year.) If you have some major expenses that are coming up which will require a contractor's services, check whether you can pay them with unsold inventory. "Businesses can barter too," USA Today notes, linking to two different web sites exchanging services and more. ("Do you have extra inventory? Unused staff time...? [U]se what you already have to obtain exactly what you need....")
To survive this economic climate, there's no one-size-fits-all solution. But there's always opportunities to improve your position - especially by staying creative!