Many small firms are focusing on short-term survival rather than long-term strategic goals. But, this shouldn't be at the expense of sound business planning - and particularly an adaptable marketing plan
A survey from Lloyds TSB revealed that more than a quarter of small business owners felt the recession had no impact on their business planning, while a third admitted they didn't have a plan at all.
Yet small business owners can increase their chances of getting through the the downturn by streamlining their firm and adapting to the needs of the market.
During hard economic times, regularly updating your business plan is vital. It should go hand-in-hand with cutting back expenditure and keeping a keen eye on opportunities to get a hold in new markets. The businesses most likely to survive are those that recognise any opportunities when they arise and that are geared up to exploit them when they do. They also tend to have the right tools and minimise their overheads so they have a lower cash-burn than their competitors.
Assess your main areas of expenditure to see where you can make savings. These are likely to include premises, staff costs, suppliers and equipment. Consider whether remortgaging, subletting, renegotiating leases, using more temporary workers or switching to cheaper suppliers are viable options.
However, one expense that shouldn't be cut back is marketing. You can't afford not to market your firm. If customers are not aware of you, how will they find you and buy from you. Just make sure you and money you spend on marketing is spent prudently and generates a return.
If you are considering redundancies, consider whether you'll have enough resource and goodwill to meet any new opportunities or demand as the economy picks up.
Diversifying can also help you survive. You need to consider whether your customer base might dry up during the recession. Can you offer new products or services to different sectors to counteract this?
The inevitable casualties of the downturn may also allow you to take customers and contracts from failing competitors, so keep a close watch on your sector. You should also ask suppliers and customers for information and keep updated by reading industry news in sector-specific magazines or on trade association websites.
While you need to adapt to the needs of the market, you must maintain your unique selling point. Your point of differentiation is what makes you stand out from the crowd.
Despite the doom and gloom, the downturn hasn't been a disaster for all. Many businesses have discovered opportunities for growth and even mergers. The key is to avoid neglecting your day-to-day business. Stay alert to what is going on and seize any opportunities.
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