Business Owners Take Action to Offset Slow Economy

The economy has an effect on all our businesses. As business owners and as consumers we hear about and can sometimes feel the contractions. Yet how bad the economy really is is a matter of perspective. Fear sells newspapers and ads on news channels, and the prospect of "recession" is pretty scary for many folks. But your small business is not dependent on the consumer confidence index, so negatively reported in the media. In slow times, just like in good times, your business is dependent on retaining customers, attracting a few more ideal customers, and operating efficiently.

The economy is cyclical. Every business in the U.S. is never uniformly in a boom or recession. It's important to analyze what's happening in your market and how it ties in with the fortunes of the larger economy. Many small businesses feel it most when customers are forced to change their spending habits. It's during these times that businesses have to take action and change business practices to offset these market changes. It's the smarter small businesses that are using this slowed economy to streamline operations, look at new potential markets and improve their marketing. When the economy rebounds, these businesses will be stronger.

So what are some pro-active strategies you can use to help your business perform in a slow economy?

? Be a more valuable resource to your current customers. When customers make decisions in a slow economy, they're more likely to go with a trusted source. Market to your customer database.
? Streamline costs or consolidate wherever possible. Having a firm grasp of your businesses financials allows you to make these decisions. Ask detail questions about how money is being spent.
? Customers look for deals. When customers' spending habits change you may need to change how you price your product or service while still maintaining a profit margin. A promotional price or offer may keep the phone ringing or customers coming in.
? Think growth while your competitors think downsize. While there's definite risk associated with attempting to grow your business in a slow economy, there's the reward of a stronger business when the economy rebounds. Try expanding your line of products or services, targeting a new market segment, or reaching into different geographical areas.
? Cash is king. When growth is not an option in a slow economy the smart business owner knows how to hunker down and preserve cash flow. Resist buying a lot of inventory, trim employee hours, invoice quickly, diligently pursue receivables, and hold payables a bit longer.

Remember, the economy is cyclical. Try not to get caught up in how the media portrays the current economic climate. What matters most is what's happening right now in your business and what actions you're taking to ensure your business continues to perform profitably. Then when the economy recovers your business will be better positioned to take full advantage of the upswing.