Top 10 Small Business Tips for a Tough Economy
Top Ten Ways To Survive and Thrive
If you are like most store owners and small business people we speak to, you are feeling a little (or maybe more than a little) nervous about the future of your business and the business community you belong to.
And with good reason. Some businesses won’t make it through the tough times ahead. But never fear...
There are common sense strategies to turn adversity into opportunity!
So, with a nod to David Letterman, we are pleased to share with you our very own Top Ten List
Ten Small Business Tips To Help You Survive and Thrive in Uncertain Times.
# 10 – DON’T GO IT ALONE
Find a colleague you can share your triumphs and challenges with on a regular basis. Two heads are better than one when solving problems, and you can help keep each other’s morale up. We all need a cheering section occasionally to stay in business.
Your business buddy might be someone from your community that you can meet in person for coffee or lunch. He or she could also be someone you met at a trade show – someone with the same kind of business you’re in, but in a different city or state. Phone calls and emails work!
Why not try developing both kinds of relationships? They each provide a different, yet equally valuable, kind of support.
# 9 – FOCUS INTENSELY ON MARKETING AND CREATING SALES
In uncertain times, marketing is more important than ever. It shows confidence, and it will allow you to leapfrog your competitors who are reactive and driven by fear.
But try to use imagination and hard work instead of cash! Here's a small business tip: be smart, be cheap - be a guerilla marketer. You don’t have to spend a lot of money to keep your message in front of your customers and prospects.
# 8 – MANAGE YOUR INVENTORY LIKE YOUR BUSINESS DEPENDS ON IT, BECAUSE IT DOES.
Chances are you have more money invested in your inventory than anywhere else in your business. It’s your largest asset and your biggest expense.
Too much inventory, or the wrong assortments of inventory are heavy financial burdens to carry in difficult economic times. They can easily drag you under.
Here are three important strategies for managing your inventory and staying in business in uncertain times:
- Use open to buy planning. This is the most powerful way to keep your inventory at an appropriate level.
- Always buy bestsellers. Don’t fall into the trap of stopping all purchases if your sales drop and inventory levels balloon. You still need to generate sales and your customers count on you to have their favorites in stock.
- Be ruthless marking down the “dogs.” Excess stock sitting on your selling floor should be turned into cash to pay the bills and cover the payroll. There are many, many more ways to “buy smart.” Start doing it today!
# 7 – BE WILLING TO CHANGE HOW YOU DO THINGS
The ability to adapt to changing circumstances is a defining trait in all successful businesses – and a definite advantage for small businesses.
Small businesses are able to react very quickly and relatively easily to the changing marketplace. Large corporations have a harder time changing their selling and marketing strategies. Think inflatable zodiac vs. enormous oil tanker. Your competitive edge to stay in business is maneuverability – get ready to run circles around the big boys.
Pay close attention to what things are working for your business and which ones don’t seem to be working as well as they did in the past.
- What’s selling? What’s not? Switch your buying dollars into what’s selling now.
- Which marketing messages are getting customers back in the store? Which are falling on deaf ears? Use the messages that speak to your customers now.
- Which expenses are suddenly running too high? What services are now paying for themselves or are a great deal? Adjust your spending.
Don’t get stuck in a rut. If an old strategy isn’t working any more – find a new one that does!
# 6 – THERE IS POWER IN PARTNERSHIP
Another great small business tip: now is a great time to work hard at creating close and personal relationships with your vendors. Remember, their sales are down and their inventories are up, too!
Pick the vendors that are most important to your business and start working on those relationships. Talk to them openly about your business needs as well as theirs, then try to create some “Win-Win” situations for both of you. Here are some ideas:
- They need immediate cash flow? Ask for deeper than normal discounts if you pay in 15 days.
- They want to maintain margins? Ask for longer extended dating if you pay full price.
- If they are carrying too much inventory, check on overstocks and ask for unbelievable deals (better than sale price) on these items if you also buy a certain amount of regular priced merchandise.
- Give them your projected stock needs, if they give you priority allocation and shipping. They avoid over manufacturing and you get all the merchandise you want before your competition does.
- Always let them know if your payment will be late so they can be proactive about their cash flow.
You and your vendors need each other in order to make it through the difficult times ahead. Start now to build your most important partnerships.
# 5 – PRESERVE YOUR CASH
During difficult economic times cash is king. Long live the king!
Watch your expenses very carefully and think twice, or three times, before spending your hard earned cash. These five small business tips might stimulate your thinking...
- Track your payroll. If sales decrease, so should your payroll.
This means you may need to work more hours yourself! One rule of thumb is to keep your combined rent and payroll at about 25% of sales – although the exact percentage that is right for your business may be different.
- Delay capital improvements, if possible.
Can you live with that old carpeting for one more season? Do you really have to buy that new computer system right away? If you can wait, do.
- Get updated quotes on your insurance policies.
You may be able to save quite a bit of money by shopping around.
- Drive to the trade shows this year, instead of flying.
And think about which shows you really must attend. Can you get most of the information you need from your local vendor reps?
- Beware of overbuying.
Make sure you have the stock you need to generate your planned sales, and never run out of bestsellers, but think twice about taking on new, untested lines or expanding into new categories.
Dig out your P&L statement for last month and figure out where your expenses might be running too high. How can you preserve your cash?
# 4 – KEEP IN TOUCH WITH YOUR CUSTOMERS
Your most important business asset in any economic climate is your customer. In uncertain times, it’s even more important that you nurture your relationship with each and every one of them to stay in business.
Let them know you value their business. Tell them about the wonderful stuff happening in your store. Make sure they know you’re doing it for them.
There are many, many ways to stay in touch with your customers – post cards, bag stuffers, newsletters, advertising, flyers, catalogs, brochures, invitations, posters, phone calls, or thank you notes to name just a few.
But we think the most effective, easiest, least expensive, and fastest way to keep in touch with your customers is by email. Remember, in uncertain times you are looking for maximum flexibility, minimum cost, and sales focused strategies. Email has it all.
How could you customize these four email small business tips to fit your business?
- Restaurants might send a daily message with their lunch specials to all of the local businesses at, say, 10:30 when the decision about where to eat is starting to float to the top of the agenda. Who could resist your lemon chicken linguine in rosemary cream sauce?
- Any business with fresh, perishable items could send a message like, “The most gorgeous shipment of pansies I’ve seen this year has just arrived. Stop in on your way home from work and take some home today.”
- When new seasonal merchandise arrives, "Come and check out the new cruise wear from Tommy Bahama. Its gorgeous florals will brighten up your dreary winter days.”
- Got a great deal? Try this, “We’ve just marked down the spring bedding collection from Perry Ellis. Stop in now for the best selection and a really great deal.”
Even if you don’t have the capability to do mass e-mailing right this minute, start getting your customer's email addresses. After the holidays you’ll have time to set up your email system, but now is the time that all your customers are in your store.
# 3 – ALWAYS RESPOND TO STRESS WITH ACTION
It’s natural to feel stress when times are tough. Here’s our best advice on how to handle it...
When you start to feel the pressure that comes from slower sales DO SOMETHING. Call a customer, sweep the sidewalk, refocus your marketing efforts, or remerchandise a section of the store, but always respond to stress with action.
Don’t mope, whine or feel sorry for yourself. Your customers want a fun shopping experience and your staff needs you to provide positive, proactive leadership to stay in business.
# 2 – DO SOMETHING GREAT (AND UNEXPECTED) FOR YOUR STAFF
Your staff is almost certainly feeling the pressure of slower sales, too. And they are the people standing face to face with your customers bringing, or failing to bring, money into your store. They are the people representing you and your company to the rest of the world.
A little morale boost can go a long way to improve customer service, product sales, and employee satisfaction. You don’t have to spend a lot – or even anything at all – to do something great for your staff.
Try these small business tips on for size:
- Send them all a personal thank you card.
- Make your famous peanut butter and chocolate fudge.
- Ask a vendor to donate a small gift for every employee.
- Create a photo bulletin board with fun pictures from the past year.
- Organize a cross-country ski expedition. Close the store on Sunday afternoon if you have to.
- Invite them to dinner at your house.
- Get the employees to research local charities, have them vote on one, and make a donation in their names (not the company name).
- Give one person each week an extra long lunch and five bucks for dessert.
- Put their names and pictures in your monthly newsletter along with a thank you.
- Stick a post-it note on their paycheck noting one important contribution they made in the last pay period.
You take it from here. There are millions of great ideas. The more personal the gesture the better it will work. Think up some great ideas that your staff will love.
For great ideas on coaching and motivating your staff, check out our Staff Development Kit in the Retail Mastery System.
# 1 – THROW BACK YOUR SHOULDERS, PUT A SMILE ON YOUR FACE AND REPEAT AFTER ME, “I AM TENACIOUS!”
Tenacity, determination, and grit count for a lot when times are lean. Get ready to do the hard work it will take to make your business not only survive, but come out of this economic slump a thriving, stronger-than-ever, enterprise.
Remember: In order to be successful in business, you have to stay in business!
For more small business tips and information on how to turbo-charge your store, check out the Retail Mastery System. You’ll find nuts and bolts strategies that mean the difference between big-time retail success, and barely squeaking by.Wishing you great sales and lots of fun,