By: Paul Nolta, Business Consultant
As the title to this article suggests, it takes commitment and perseverance for a small business owner to survive in today’s economy and to prepare for tomorrow’s economic growth. To survive in today’s and tomorrow’s economy a small business must consider several factors in their market such as financing, overhead, technology, capital spending, personnel and marketing
Strong businesses don’t assume they can change a market; they examine it closely, understand it, and then develop their approach accordingly. It is not an arrogant approach. As soon as a company starts thinking it has “it all figured it out,” often the market will show them (sometimes painfully!) all that they do not know. Approach a market with confidence, but also with respect for the fact that even large groups of customers can turn on a dime – and the success of your company can turn with it.
Take every opportunity to learn about your business and your market. A big part of this is adopting the viewpoint of a humble student. And while being humble is an important part of learning from the market, it also is important to take on the mindset of the student. Here are some important areas to gain knowledge in:
Financing and Capital Spending
Do you as a business owner have your financing arranged to meet the needs of tomorrow? If indeed the economy is turning around, do you have debt and/or equity arranged to finance any potential expansion ahead of the power curve. As far as debt financing, have you considered obtaining a line of credit to support hiring additional staff, purchasing additional inventory or equipment to prepare for additional business or contracts. If you haven’t, you may be stuck with trying to do that out of your cash flow. If sales don’t pick up as you projected, you may end up in a negative cash flow situation, which is very difficult to recover from.
Have you analyzed your overhead expenses and compared them to industry averages? Have you driven as much cost out of the organization as possible without sacrificing customer service? Have you made the necessary adjustments to get your expenses in line with industry-accepted percentages?
Have you taken the opportunity during this economic slowdown to clean up you records and/or implement new programs to track costs and sale? Have you worked on improving customer service by tracking your customer complaints better? Have you considered implementing a website to enhance your marketing capabilities?
Have you taken the opportunity to sharpen your “sustainable competitive advantage”? Have you added more products and services? Have you attempted to reanalyze your market and market niche to find new growth areas in your market? Have you taken advantage of any “targets of opportunity”? Have you prepared to defend your space from potential competitors? Remember, the future is in your hands. The economic recovery will provide numerous opportunities in one of the highest business growth areas in the United States, Southern California and the Inland Empire.
Being in business requires confidence, but can be hindered by overconfidence or by not taking a serious enough approach to collecting information. There are always dozens of details and an abundance of learning opportunities for a company. Take the time to learn about the 100 workshops a year offered for little or no cost, by the Inland Empire Small Business Development Center (iesmallbusiness.com). In addition there are several opportunities to gain knowledge from other resources such as your Local Chamber Of Commerce.
What will you learn about better serving your customers today?
Paul Nolta is a Business Consultant with the Inland Empire Small Business Development Center, a non-profit organization that provides free consulting services to small businesses in the Inland Empire. Schedule your no-cost appointment with an SBDC Business Consultant by calling 951.781.2345.