Tuesday, September 30, 2008

The Economic Ripple Effect To The Small Business Owner

The turbulent oceans of our economy are fraught with stormy waves of uncertainty, fear and outright panic. No where is this economic turmoil more readily apparent than with the the small business owner and individual entrepreneur. If the past week of anxious phone calls and requested meetings from current and prospective clients is any indication, I suspect if you are a business owner you too are concerned and worried.

I am not an economist and I certainly don't know how to predict the future. I have however survived as a business owner some very turbulent times that hit our local and national economy. I know the fear and I am all too familiar with the sleepless nights that seemingly compound our worries of where the next rent check or payroll payment is going to come from.

The advice I give my clients is that things are survivable provided you have a plan. I know many business owners that simply didn't respond quick enough and watched their businesses seemingly implode overnight. It happened because they didn't have a plan and they let fear take over - something that happens easier than you might imagine. As you can imagine fear and failure seem to run in the same circle and so a lot of great businesses simply cease to exist.

Here's what I know. We are a free country where all things are possible. This current economic situation is not only survivable but it will be a financial win-fall for some. Sure you might say that's for the fat cats with the big money to invest while things are down, that isn't me. Well it isn't me either. The financial win-fall can be yours too if you have a plan.

Here's the advice I give my clients and you get the benefit of it without having to spend a dime.

1. Reach out to everyone of your clients and talk to them. Have a conversation with them to see what the current economy is doing to their business and listen. Listen for signs that there might be trouble in their business and offer to help when and where you can. Big opportunities grow from adverse situations like these. You customers will appreciate you for it and you may develop a loyalty that pays you dividends for years to come.

2. Review your receivables daily. The first thing that tends to happen with small businesses is that receivables get out of control. When you look at them daily it becomes impossible to ignore what can be a killer problem to your business. And don't just look at them - do something about them. Call your late paying customers. Get them to pay. Let them know that you need to be paid within terms - set their expectations going forward. Stay in front of them consistently and your company will likely get paid more timely than other vendors that let their invoices creep past due.

3. Use the time to negotiate more flexible terms with your bank and your landlord. I think it is imperative to have a personal relationship with your banker and your landlord. That personal relationship allows you to go to them and have open and honest conversations about your concerns about your business and it gives you both ample opportunity to discuss options - there are always, always options. I would suggest doing this even if your business doesn't need to - you never know how you can lower your interest rate or your dollar per square foot if you don't ask. Ask!

4. Review the troops, vendors & suppliers. Some of you may consider this cold but I have to say it. If you run a business there is fat somewhere in your financial bowels. It is your job to proactively seek it out and remove it. That may mean you have to make some difficult decisions about cutting personnel that aren't making your organization money or helping you move the ball further down the field. It sucks and it's painful but it can help. Vendors and suppliers are the same way. Do you really need the most expensive cell phone and a Blackbery? Do you really need the water bottle service or to pay someone to take out the office trash? Sometimes cutting the fat of excessive services can add significant dollars back to your bottom line. Dollars you may need to survive on in the weeks and months ahead.

5. Build your resource network. The best time for you to be out making connections is NOW! Your business needs you actively having as many conversations as you can possibly have. Those conversations open doors. Behind those doors are more opportunities for your business, more advice from resources you can't possibly imagine and ultimately it will demonstrate to you and to the public that your company is alive and kicking.

I know in the weeks and months ahead there may be more bad news. All I can say is don't panic and don't lose focus on your business. When you are in control and "minding the store" it makes it so much more difficult for fear to take over.

Ripple On!!!

If you have concerns about your business or entrepreneurial venture and want to talk I am available. I will say that I don't give free advice except here on the BLOG so if you want to chat please keep that in mind.

Email is the best way to reach me. If you want to chat further about your business send me an email to steve@ripplecentral.com and we will arrange a conference call.

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