Survival tips to help small businesses survive tough economic conditions

Keeping a small business afloat in difficult economic times is challenging especially, considering there is no set playbook to follow to ride out the storm and right the ship. Every small business is different, and each carries its own risks and rewards. These differences make copying another company’s turnaround strategy to the letter unrealistic, but extra attention to detail can help ensure that a business survives.

There are however general strategies business owners can follow to maintain sanity; looking at the big picture, inventorying the staff, making sure the business has ready access to cash, sweating the small stuff and avoiding a sacrifice of quality are key ways to keep a business afloat.

When times are hard, businesses may need to shift their focus from profits to survival. People have a tendency to attack the most obvious immediate problems with vigor and without hesitation. That’s understandable and might make good business sense in some situations.

It is advisable to step back and look at the big picture to see what is still working and what might need changing. It’s an opportunity to better comprehend the size and scope of existing problems and further understand your company’s business model; determining how its strengths and weaknesses come into play.

Fix a similar kind of lens on analysing how your product or service fits into the marketplace now, how the economic crisis has affected your customers and suppliers, and all the other key aspects of your business. You need to know how well your business model fits the current environment and forecast what various alternative scenarios of the future might mean for it.

Both small business owners and large corporations tend to be penny wise and pound foolish when they hire the least expensive workers. Sometimes the productivity of those workers may be suspect. Hiring one worker who costs 20 percent more than the average worker but works 40 percent more effectively makes sense, particularly during periods of crisis.

Small business owners should take steps to ensure that the company has access to cash, particularly in periods of crisis, establishing a good relationship with a banker is always useful for a small business.

Although it is important to keep an eye on the big picture, a small business owner should not overlook smaller things that may have an adverse impact on the business. A large tree obstructing the public’s view of the business or the company’s signage, inadequate parking, lack of road/traffic access, and ineffective advertising are examples of small problems that can put a big dent in a business’ bottom line.

Keeping a handle on costs is crucial in tough times. Owners need to stay on the offensive and get employees on board with changes that are being made. However, be cognizant of not sacrificing quality when making these product changes.

Business owners seeking to improve profit margins should be wary of making dramatic changes to key components.