Surviving the Current Economy

Thought I'd better do my first business based entry for 2009 though I'm not 100% sure I'm out of holiday mode yet.

I definitely believe that 2009 is going to be a hard year for small/medium business and owners/managers need to make sure that they're addressing issues within their business as there's not much influence you can have on the external factors.

The first thing to do is have a good, hard look at your P&L and balance sheet.

In your expense lines, is there there anything there that you can do without? I'm not suggesting you cut to the core because I think that is counter-productive. You should be looking at what you are purchasing and asking whether you are getting the best price for the quality you are receiving? Are you you paying through the nose for a high quality product when a cheaper one will do the same job? Consider joining a buying group to take advantage of bulk buying power if you aren't big enough on your own. There many of these around - just look on the web.

In your balance sheet, are you getting a return on all your assets? If there's a millstone around your neck (e.g. a leased car that is not being used) it may be better to pay for the problem to go away (i.e. pay the termination fees and get rid of it). That way you have a fresh start and you're not constantly looking at a problem every time you go into the office.

What about trying to generate new business? I would urge you to seriously consider joining a networking group of some description. These can take on many different guises - industry groups, Chambers of Commerce, Rotary/Lions. Personally, I belong to a BNI (Business Networking International) chapter. Once a week we meet for breakfast, each member gives a 60 second spiel on their business (usually something new they are doing or a different service they offer), and then members swap referrals. I am constantly amazed at the number of referrals that cross the table - in our group of 30 odd members, there are in excess of 20 referrals each week. It is important that you join the right group but the best part is that there is only one member from each industry group in each chapter - for example, I am the only Business Consultant in our chapter. It's definitely not just doing business with each other, it's doing business with people that other members know.