This isn’t the weather report, at least not in the usual sense. This is the “whether” report. Whether small businesses can survive the continued immobility and insecurity of the economy.
Small business competes in a shrinking market and the usual signs of recovery are at best deception at worst non existent. In order to compete, companies require production. In the past, an increase in temp hiring after a downturn indicated that permanent hires weren’t far behind. Not so these days. Companies aren’t vetting temp employees as a means to permanent choices. They merely want part time workers for short term peaks and intermittent production.
Firms that have increased production seemed to do so with their existing plus the temporary staff as needed. There is still much uncertainty about sustainable growth, consumer caution, higher costs related to taxes and new reforms. In this recovery increased temporary orders are not the harbinger of economic healing. Companies forced to compete for already reduced market share can’t decline an order or miss a deadline.
Experts, pundits and commentators have expounded on reasons why we are in a jobless recovery. I’m more interested in how, as a small business, I can survive until the sun shines consistently over our economy. The book, “The Small Business Survival Guide: How to Survive and Thrive in Tough Times,” presents suggestions that make sense.
Sometimes sense falls by the wayside when stress and anxiety gain the upper hand.
I like the 4 R’s that are mentioned and I have added 4 R’s of my own.
Your rent is one of your largest expenses. Most landlords value a good tenant and will work with you to reduce your rent or defer some portion of your rent.
Contact vendors and ask for lower cost or longer terms. This is an opportunity for a long term relationship to develop as tolerance and trust builds between you and your vendors.
Are all the services/products you supply profitable? Can you let go of ‘favorites’ that are no longer cost effective?
Ask your firms to set fixed costs for your repeat projects. Ask for an ala carte price list for projects so you can segment the work to fit your budget.
There are many ways to achieve this painful step. Layoffs, work week reduction, wage reduction and reduction from full time to part time are steps to reduce payroll. All decisions should be made on the basis of capability not seniority or need. If possible offer an incentive program to those remaining employees to earn back some lost wages.
At the end of the day don’t beat up on yourself. Running a company is not for the faint of heart. Make decisions fairly and enact those decisions with compassion and respect.
Can you negotiate downsizing? Investigate consolidating into less of your existing space and renting out some office space.
What office services can be outsourced to save on employee salary/benefits? Are there truly 1099 opportunities for you to engage?
Will all of these R’s turn the tide and help small business owners keep afloat or will they turn to GRRR’s of frustration while we watch a pirate economy scuttle our recovery?