Blogs

Checking the Business news twice daily, cutting products, personnel and services, and waiting for Wall Street to recover may be an initial way entrepreneurs and small business owners deal with an economic downturn, but they aren't the only—or wisest—ways to survive a recession.

Glass half-full optimism dictates that when times are tough, the tough get creative. Not only is looking for the silver lining a healthy, proactive way of looking at problems, it's also an empowering way to focus on doing something positive and staying ahead of the competitive curve.
  
As a small business consultant who has worked with hundreds of entrepreneurs over the last 13 years, branding, re-branding, and re-organizing their businesses' strategic goals and organizational cultures, I've seen some common problems that many small business owners face in tough economic times. Here's my five top tips to trim your sails and catch favorable winds into 2009:

•    Safeguard the Mission:  Organizations are often tempted to experiment with products or services that are not closely linked to their "heritage," their initial market offerings.  Expand your mission only with great care, and when it happens, make sure there is consistency between the original and the new missions.

•    Adapt Strategies:  While organizations should be consistent in pursuing their mission or purpose, they should be very flexible in choosing strategies to achieve it.  Your goal here is to "fly fast" and "fail fast," quickly building on the strategies that work, and quickly replacing the strategies that don't work.  

•    Seek Out Business Smarts:  Smart organizations are created by smart people.  Smarts come in many forms, from street smarts to school smarts.  Create a mix of smarts for your organization, as this will give you the richest business perspective.  Remember to seek out smarts in advisors or subcontractors, as well as employees.

•    Put Cash Flow Even Before Profit:  Obviously, profit is fundamental to the long-term survival of an organization (even if it's a non-profit which distributes all of its profits).  However, an unprofitable organization can remain in business over the short term as long as it has adequate cash reserves.  Strive for at least six months of cash reserve.

•    Balance Short-Term Versus Long-Term Futures:  The best decisions for a growing business benefit both its short-term and long-term futures.  Unfortunately, many business decisions are about trade-offs, such as releasing profits to satisfy investors short-term, or investing profits to build long-term infrastructure.  Strike a balance!

Our grandmothers had it right when they told us, 'Worry is like a rocking chair. It keeps you busy, but doesn't get you anywhere.' While it's important to be realistic about your financial and organizational situation, it's more important to empower yourself to move positively and steadily in the right direction for 2009. The best paths to success to begin with the right planning.