Small Business - How to Survive and Strengthen Your Small Business in a Recession!
How is your small business being affected by the current economic slowdown?
I find a wide range of answers to that question. Some owners are still doing fairly well while others are just barely surviving. It generally depends on what type of business you have and how well prepared you were when things began to slow down.
It was inevitable when you really think about it. The excesses created by the Federal Reserve-induced housing bubble and the poor credit practices across the board. Whenever you have that much excess, you can expect a downturn to follow.
Are we in a recession or headed for one and how do you survive?
Pay attention to your cash flow. Your cash flow will determine whether you can keep the doors open. Put together a realistic cash flow forecast for at least six weeks out. Check to see how big your cash reserve is.
Pay attention to your accounts receivable. In bad times your clients will be prone to holding on to their cash and may slow pay you. It's cheaper for them to use your money than to borrow from the bank. Be assertive with your clients. Let them know that you expect to get paid, just like they do. Remember, it's the squeaky wheel that gets the grease.
Cut out any fat that you have in your business. You may consider reducing the work week for some of your employees instead of laying them off. Your employees would rather work a shorter week than not work at all. Remind them that you have to do what is necessary for survival of your business and their job.
How can you strengthen your small business in this slowdown?
Take a good look at your business. Is it enhancing your life or running your life? Now is a good time to improve your business skills. What kind of systems do you have in place? Is the business dependent on you? Do you have a clear vision for your business and is that vision being met?
You may want to do an independent assessment of your business to see where the weak spots are and then learn how to strengthen them. Take the attitude that only good will come from this slowdown and then make that good a stronger business.