How to Weather an Economic Storm in Small Business

It’s been a challenging few years for anyone doing business just about anywhere in the world.  The Great Recession dealt a powerful blow to the pocketbooks of governments, businesses and individuals and it is hard to find anyone, anywhere, who has not experienced its impact.  

From a manager’s perspective, this crisis has provided many opportunities for growth and refinement, albeit set against a backdrop of one difficult decision after another.  If anything, we’ve gained a significant amount of productivity and efficiency in our nation as a result of the necessities to maintain solvency in a world of greatly restricted credit.  Businesses that tightened their focus on core operations had a better chance of surviving than those that went blithely along as if the rules of the game had not shifted.

In a crisis, everything appears to be of equal importance.  This is especially true for small businesses, who unfortunately faced the double whammy of banks tightening their lending and credit card companies reducing their limits, often for no apparent reason.  Given that more than half of small businesses relied on credit cards as a source of financing, owners across the country had to change the way business was financed…virtually overnight.

What have I learned as a manager during the worse economic environment since the Great Depression? 

First of all, human capital is a company’s greatest asset.  Put your people first.  The extremity of the situation forced many business owners to make difficult staffing decisions in order to deal with cash flow crises or worse, bankruptcy.  Businesses that did not react quickly enough, swiftly enough, made the headlines as one-by-one, large and small enterprises filed for bankruptcy across our great nation.  As a business manager, there is nothing worse than having to let personnel go.  For most small businesses owners, staff, family and friends are one and the same.  It is painful no matter how you cut it. 

Second, look for ways to add value to your client relationships.  Be creative.  The rules of the game in a new economy are different than they were.  Adapt or perish.  One of my National Sales Manager’s mantras is this: “How can we make it easier for our clients to do business with us?”  A great thought for anyone in any business.  Look for ways to add value that complement the “sweet spot” of your relationship with your clients, ways that build upon the foundation of your core business.  

Third, a focus on improving efficiency must be a priority in all levels of the organization.  Cutting costs wherever possible without damaging the present or future of your core business is essential.  Trim off any ancillary functions in the organization to preserve the core business.  Underperforming assets must be released, unless there is some great (future not nostalgic) reason for keeping them.              

Finally, stay positive.  Motivate.  Encourage.  Take heart yourself.  These downturns have happened before and they will happen again.  As interminable as they may seem, these periods in history come and go and have never proven historically to be permanent.  If anything, redirect the energy that you would waste on worry, fear, panic, blame or regret to more productive pursuits, such as creative thinking, rallying the troops and refining and simplifying work flow.  Continue to invest in growth, in research and development, wherever practicable. 

While small businesses are the engine of the U.S. economy, the biggest job creator in the country and a legacy of the American dream, they often don’t get the credit or attention they deserve.  Realizing this, the question to anyone involved in small business is this: “How can I most creatively handle the situation – exactly as it is configured?”

15 thoughts on “How to Weather an Economic Storm in Small Business

  1. Joshua

    Imagine a world where the only currency was given through the heart. Where the exchange for service was gratitude, and appreciation, where one did what one did not to feed their family but that the neighbor might be looked after, in such a state one would not ever need worry about oneself, but tirelessly be concerned that others are being cared for. I can imagine such a place, and it’s through us that someday such a place might exist!
    There is lot’s of work to be done to get there, but even if we were there since there are so many of us there would still be lots of work to be done…..we’re there now.

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  2. Lady Leo

    In an earlier post about Elizabeth Gilbert author of Eat, Pray, Love. She asked a question that successful writers have to ask themselves…Are my best years behind me?
    Any time there is a significant goal reached or change such as this economic melt down we have to ask ourselves this question. If we answer yes, then we have some work to do on ourselves. If we answer no, than off we go onward and upward ready to take on the next challenge.

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    1. It is so sad to witness another getting off track in his or her development. There is so much to be given through each one, regardless of age. In fact, I am convinced that the magnitude of impact and scope of creative expression should increase over time, not decrease!

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  3. Lara Mealor

    Thanks Gregg! Wonderful to consider these points this morning. These are delicate times when the foundation of security is being shaken. This is also a wonderful time for reassessing priorities and refining our thought process regarding money, time and energy investments. Continuing to add value and seeing the opportunities to provide true service has kept my momentum building and it is assisting my clients to do the same. I am so very proud of my clients attitude and continued positive action during these challenging times. They are the ones who are truly making a difference in the world and it is so inspiring.

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  4. Brenda Ruppright

    What a great gift you have given to those managers out there that have maybe been going through the exact challenges in their businesses with the economic times but maybe could not identify them as articulately as you have today. Each company, each department in a company, are all unique but these points are going to be a great assets to those facing these same challenges.

    Thanks to every one for thier thoughts, such valuable information.

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  5. Mark

    As you say, hardly a one of us has been unaffected by the present crisis. It’s the best captains who can navigate in rough seas. But don’t just sit back and let others take care of it. We each have the opportunity to earn our captain’s hat, learn new navigation skills and play our parts the best way we know how. Your points are excellent as to how we can do this and most importantly uphold our integrity and increase our value.

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  6. Claudia Reddick

    You can tell by my last couple posts that I’m reading Earle Nightingale’s Strangest Secret for the “umpteenth” time.

    I find his views on business practical; his solutions always begin with ourselves. After a few years on this earth you realize you’re the only person you can change and when you do change; where you see immediate results.

    This next thought has stayed with me for the last 20 years, I think he first said it in the 1930’s so you can see it was after the “great depression”.

    He said, “The biggest mistake that you can make is to believe that you are working for somebody else. Job security is gone. The driving force of a career must come from the individual. Remember: Jobs are owned by the company, you own your career!”

    That is a totally empowering statement. Yes we will be very tested by the economy,as I’ve experienced 4 or 5 times as well. Sometimes my pocketbook was devastated
    but the expertise, passion and ability to start again or keep going isn’t lost, unless you never developed it or you let it be extinguished by circumstance.

    In this present economy there are more people than ever beginning again. Another of Earle’s thoughts could be spoken to every young person as they embark on their careers and to all those looking for that new start.

    Earle said, “Get into a line that you will find to be a deep personal interest, something you really enjoy spending twelve to fifteen hours a day working at, and the rest of the time thinking about.”

    When I hear that I think it has to be something I am passionate about. Something that does make a difference. This will be as unique as there are people.

    If you can take one more quote today Jack Welch said it best, “Change before you have to.”

    Wherever we are in our lives and careers this is our opportunity and where the excitement can begin.

    Thanks, timely subject. I’m looking forward to reading the comments today. Have a new Monday!

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  7. Josh

    Thanks for the creative outlook here. It’s true we have to come up with new ways of handling things when the rules change, which they have. I too have found the current turmoil to be the perfect time to examine the work my company does and the value it provides. Value is what creates opportunity, so now is the perfect time to be creative and innovative. I appreciate those who have seen it as their chance to shine. It demonstrates not only their abilities but their integrity.

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  8. Chuck Reddick

    This latest ‘recession’ is probably the 6th or 7th that I have experienced in my lifetime and though more extreme than the others there are some huge benefits to all who will sieze the opportunity to be proactive rather than to be a victim (choices aren’t they!). Actually we often become complacent in between these opportunities called recessions which cause the actual event to be more dramatic than it should be. Here might be some good starting points whether one is an employee or an employer:
    1. Always do more than what is expected of you or than what you are paid to do.
    2. Always look for places to add value whether it is noticed or not (it is always noticed by the way)
    3. Act as if you are being watched by your children or grandchildren – this will cause you to focus on doing the right thing each moment.
    4. Identify your core values and make certain that they are in line with the company’s core values. Than do everything that you can to support those core values at all times!
    5. Enjoy what you are doing; focus on contribution, not on what’s in it for me.

    When you focus on these and other points the recession won’t hit you, or at least it won’t hit as hard as it will when you focus on taking short cuts or becoming complacent.

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  9. Brad

    As a Small Business Owner these suggestions are worth more than gold. We are seeing too many owners close doors that perhaps with a different approach could still be in business, growing even.

    In my twenties I experienced first hand a family business closing. Over 30 employees depended upon my Fathers guidance….”there wasn’t much that could be done, the big boxes are too much to compete with”….he ended up closing the doors, everything sold and what money was available was given to employees to carry them over while they found a new place to work. My Father even attempted to find many of them jobs. He was left with nothing, except the feeling of having done everything he could to prevent this. It was interesting to watch as people and family came back to him looking for “their share”….there was no more, he had successfully closed the doors, provided for employees, and paid off any remaining debt. Some employees and family just couldn’t grasp the fact that the “well” had dried up! Few went on to really make something of their lives, many struggled having depended upon a job they’d comfortably had their whole life. How complacent humans can become when things are going well, then add a little challenge and we turn into spoiled children.
    What if we turned our focus to the needs of those we serve instead of what’s in it for Me??

    For anyone looking to really make a difference, Bob Burg’s books, Go Givers & Go Givers Sell More are excellent reads for sound principles to GROW a business even during tough economic times. He suggests finding new and creative ways to “Add Value”! Actually they’re great for anyone looking to grow period!!
    A Doctor once said, “if you’re broke you need to find ways to give more”, and there are so many ways we can give – that’s my favorite aspect of being a Professional Sales Man, the opportunity to Give and make a difference.
    Brad

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  10. Teryl

    These points are helpful for anyone to consider, not just those in management. This is a great tool for all, young and old living in the current economic climate. Thanks for bringing such a positive outlook into a difficult time.

    Like

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