Like the weather, economic climates can infrequently be predicted accurately. However, when an economic downturn occurs, it could spell disaster for small business owners who are not prepared to weather the storm.
Thankfully, there are ways to stay strong in a weak economy and keep your small business operating until happy days are here again. Here are four tips that can help you in surviving a bad economy:
It is imperative to manage your cash flow when surviving a weak economy. If cash flow gets out of hand, that’s when small business owners whip out the white flag and start filing for bankruptcy.
Cutting costs means finding ways to keep more money in your bank. Trim the fat off of administrative expenses. Look at your expense budget lines. Can you save money on supplies? Perhaps move to a smaller and less expensive retail or office location? If you produce a product, look for ways to reduce production costs. Use cheaper materials. Make smaller quantities. Saving money on expenses goes a long way to helping you stay solvent.
Open Lines of Credit
When small business and the economy collide, it usually happens at the doorsteps of lending institutions. Banks also must change strategies for surviving the bad economy, and one of those ways is tightening their lending procedures.
However, if you have great credit and a positive lending history, you could still be able to acquire a line of credit at a bank with whom you have a relationship. A line of credit can become a business-saving financial buffer to keeping your cash flow in the black.
Ask For Government Help
The U.S. government knows that surviving a weak economy for a small business is tough business. However, they also know that small business is the backbone of the American economy and want to help keep them thriving. That is why there are numerous small business loan programs offered through the Small Business Administration (SBA).
The SBA provides guaranteed loans for small businesses for many purposes. You can apply for loans for building up your inventory, buying real estate, expanding your capital equipment, creating new jobs, debt refinancing, and a host of other options. Check with your local SBA district office for lenders in your area and a loan program that may suit your needs.
Rethink Your Marketing Strategy
Surviving a weak economy doesn’t mean you should cut your marketing budget. However, it does mean you need to squeeze every ounce of marketing effectiveness with every expenditure.
Sit down and analyze your marketing approach. You need to focus your target market and marketing efforts like a laser to reach your intended customers. Make sure your marketing messages stand out and connect with your customers. You might even update your marketing materials and brand image to project a confident approach to surviving a weak economy.
Small business owners can succeed in surviving the bad economy, but you must take initiative to analyze your situation and act accordingly.