There is a lot of hype about the looming collapse of the economy. Whether or not we’ll actually fall into a New Great Depression is yet to be seen. In either case, here are some tips to prepare you and your small business for the uncertain future:
•Cut Your Spending - Rethink every one of your expenses. Do you really need cable TV at the office or that nice rental espresso maker? Mr. Coffee and CD players are nice replacements. How about land lines? Stop buying 10 supernormus sized lattes, and put that money into your petty cash jar. You may need it.
•Stop Using Credit Cards – We all have credit lines, and collecting points and miles is a great benefit when done correctly. However, many people tend to get caught up in spending, instead of actually pay those debts off on a monthly basis, which makes those interest rates wash away any net benefit from miles. Stop using credit cards unless it’s an emergency.
•Pay Vendors Early – If your suppliers extend credit to you, check to see if you get a discount for early payments. Many suppliers might knock an additional 2% off your bill for paying within two weeks. That’s free money. If your vendors don’t currently offer you a discount, ask for one.
•Pay Off Your Debts – I know this sounds like a pipe dream, but it’s not. Make it a priority – budget, work harder. It will take time, but it is so worth it.
•Save Your Money – Do you have the ability to run your business for six months without any revenue? You should save up a six month emergency fund. You never know when things will get tougher.
•Haggle on Everything – Right now it’s a buyer’s market. You can buy virtually anything at the price you want. That includes good talent, real estate, equipment, supplies, you name it. Haggle with every person you do business with.
•Diversify Streams of Income - I like to say that in a good economy, you should be hyper focused on your core business, however, in a down economy, it may be wise to diversify or create multiple revenue streams. This could still be in the same line of business. For example, I currently run a flooring company called Natural Wood Floors, but I just took some training and became a Certified Wood Flooring Inspector. I can now do floor inspections, on top of running a flooring business.
•Network Everyday - I mean this. How many times have you known a guy that recently got laid off and suddenly starts networking to find a job? Well, had that same guy been networking all along, he may not have had to work very hard to find a job. This applies to running a small business. It takes discipline, time and patience to build a solid network. It many instances, it take about a year to two years to reap what a network has to offer, so start now. A good friend of mine says “never eat alone,” meaning, every meal (or coffee) should be had with someone you are networking with.
•Offer Great Customer Service - Learn to offer world class customer service. We are hear this, but rarely do I ever encounter it. Undersell and over deliver with each and every customer. It’s sad, but we are conditioned to expect horrible customer service, so when we end up finding it, we revel in it. We brag about it; we promote it. Spend a little time doing this, and you will be amazed at how quickly your business grows.
•Learn to Sell – This tip is really for you introverts and tech guys out there. Every employee, owner and partner in the company should be prepared to look for sales opportunities at all times. Opportunities are everywhere. A good example, which drives my wife crazy, is that every time we go out to eat at a fine restaurant I look at the floors. If they need some work, I will ask for the manager. Even though my wife gets embarrassed by this, I landed a contract for a chain of restaurants this way.
This list is by no means comprehensive, but I think it’s a good guide to get you thinking about your business and how to survive these tough economic times. What steps have helped you streamline your business? Leave some comments below.