Small Business Survival Tips–When The DOW Falls 777 Points
Posted by John Park on Sep 30th, 2008
2008
Sep 30
The Dow fell 777 points yesterday. This was the biggest single day drop ever. In addition, Wachovia was forced by the FDIC to sell most of its assets to Citigroup. And finally, the United States Congress failed to pass the heavily debated 700 Billion economic bailout plan. WHAT A DAY! I think it’s an understatement to acknowledge that we would all rather forget this week or all of 2008 for that matter. I cannot recall a time in my adult life that has caused me this much concern about the U.S. Economy.
During this real crisis, I have a deep and genuine concern for our American small businesses. As a result, I will dedicate all of my next several blogs to offering tips, tactics and strategies to sustain your business during these times. The information will come from me as well as others with expertise in the respective fields.
( Tip of the day )
DON’T SAVE A PENNY ONLY TO LOSE A DOLLAR.
In this economy, many businesses make the mistake of hunkering down to the point of detriment for their survival. It is important not to cut costs in areas that are or will generate you direct income. Here are some common mistakes to avoid.
1) Avoid termination of employees that have a direct impact on incoming revenues.
2) Avoid cutting back of advertisements that have proven to be reliable.
3) Avoid looking to reduce overhead fees on services that have a direct impact on revenues. For example, a restaurant decides to no longer accept credit cards to save on the credit card company fees. We witnessed this exact scenario at lunch yesterday.
4) Avoid raising prices and reducing the quality of your output product or service to save on material and process costs.
5) Avoid buying inventory in small quantities thus paying more per unit even though your sales history requires otherwise.
6) Avoid burning financial relationships with key primary vendors who have a direct impact on your future revenues.
7) Avoid cutting your employee morale budget (not luxuries). For example, when I was working as a District Sales Manager in 1996, my VP at the time ordered me to get rid of the coffee service for the office. It would have saved us about $100 per month. It backfired in a huge way and probably cost the company tens of thousands of dollars due to employee resentment. Now more than ever, you need your employees to work as a team.
8) Avoid being inflexible as a knee-jerk reaction. Work with others and be flexible. They are going through the same thing you are. Value your vendor and client relationships and be flexible with them.
I’ll be the first to admit that these tips are “easier said than done.” The point is that all small business owners must survive today but must not give up planning for the future. The assumption must be that your business will survive this major downturn and go on. Sanity will be on your side when it can co-exist with optimism. And yes…The Glass is Half Full.
