Clearly, the past several months have not been kind to small businesses. There is a growing consensus that we are looking at “hard times” in the world economy for at least the next several business quarters and possibly longer. Here is a “checklist” of questions you should be asking yourself right now.
First, look at your customers. Who are my most loyal customers and what do they look like demographically? Are these groups going to grow or shrink in the coming years? Have any new types of people started buying my products or services in the past several months? Would it make sense to target these groups as future growth opportunities?
If I am seeing less of a certain type of customer, why is that? Is there anything I can do to bring them back without drastically cutting prices? Are people in this area looking for products and services that nobody is providing, and how difficult or costly would it be for me to provide them?
What are the products and services that people will still shell out hard money for even in difficult times like these, and how many of those can I provide? Have I been saying “no” to people’s requests for certain products and services? Should I change my mind and start offering these? Are there any markets for my products or services (for example, overseas or on the Internet) that I haven’t pursued aggressively enough? Might there be uses for my products and services that I’m not aware of, and that might create new marketing opportunities?
Am I giving my customers too good a deal on any of my products and services? If so, can I possibly increase my prices and still beat the competition? Am I spending too much time providing services to lots of small accounts when I should be working for fewer and bigger accounts? Am I doing business with anyone who owes me money? If so, will putting the customer on a payment schedule resolve the situation? If not, should I fire the customer so as to focus my full attention on the customers who are paying their bills on time?
Next, look at your competitors. What are my competitors’ biggest liabilities and weaknesses? How do I take advantage of them? What are my biggest liabilities and weaknesses? How do I keep my competition from taking advantage of them? If my competition is a lot stronger than I am, is now the time to sell out and either join them or strike out in another business direction? Can I “leapfrog” the competition by offering new products and services that are better “fits” for people’s current needs?
Next, look at your costs. Do I really need all of the employees I currently have? Can I or a member of my family step in and do the work of some of these employees so we can reduce costs? Can I bring in my minor children to help out part-time on evenings and weekends? Are there software or other technology solutions that will do what any of my employees are doing for a fraction of the cost? Do I really need an office or storefront for this business? Can I work instead out of a home office? Can I possibly negotiate a reduction in rent with my landlord?
Where are my customers coming from, and how are they hearing about my business? Where is the “fat” in my advertising budget, and what programs should be cancelled or renegotiated at this time? Should I replace my landline telephone with a cell phone? Should I replace both with a low-cost, computer-based telephone service such as Skype? Am I taking advantage of every possible tax deduction I can take? Can I negotiate “flat fees” with my accountants, lawyers and other professional advisers? Instead of using a large firm where they bill by the heartbeat, can I save money by spreading my legal or accounting work among several local “solo practitioners” who work out of their homes?
Lastly, look at yourself. If there are any notches left in your belt, now is the time to tighten them. If you have no notches left, drill some new ones.
Do I really need a new car this year? Should any of my credit-card debts be “rolled over” into my home-equity credit line so that I can reduce the overall rate of interest and deduct that interest on my taxes? Can I save money by converting from oil to natural gas heat? Can I get a lower quote on my homeowners’ insurance premiums? Instead of a vacation, should I be taking tax-deductible classes that will enable me to learn new, more marketable skills that will generate new business?