Entrepreneurship In The Time Of Recession

In the movie Hello Dolly, Louis Armstrong says to Dolly Levi, "Mrs. Levi, you've got more businesses than a dog has fleas."

She smiles and replies, "When you're living from hand to mouth, you'd better be ambidextrous."

Okay, most of us are not living hand to mouth...yet. But since the American economic tide has turned many of us are finding that we need more-more time, more opportunities and more money to create the success we want. It's a tough time for small business owners. Our houses are worth less and if we are typical Americans our consumer debt load is more. The cost of living is rising fast and customers are clutching their wallets in fear. What can you do to weather these new economic times?

Before it's too late, start cleaning your financial house. Amazing as it may seem many entrepreneurs don't have a personal budget. If you managed to get started without writing a business plan, and many folks do, then you may have missed out on valuable financial planning and research. Pay down your personal debts. Streamline your inventory and ordering systems if you deal in real products. While the money is still flowing build up your savings.

Ratchet up your customer service. Traditional business wisdom tells us it's easier and more profitable to keep a current customer than it is to go out and find a new one. Don't lose business during this critical time because you neglect your customers. Pay special attention to the niceties of business like thank you notes (or emails), knowing customers by name and fulfilling special orders when you can. If you have employees make sure they are all well trained and polite.

Add a new stream of income-or delay cutting one off. A recession might not be the time for a fledgling business owner to quit the "day job". If you've held on to a regular job during start up, make sure you are really off the ground and operating at a profit (this process normally takes 1-2 years) before you walk away. Entrepreneurs who are already independent should consider adding new revenue streams to the mix. These can include supplementing a store with a website, joining affiliate programs that "pay per click" or writing about and selling your expertise. If you already have a healthy emergency fund of cash, consider meeting with a financial planner to create an investment plan.

Evaluate your marketing. Make sure you are not wasting time and money on advertising strategies that don't pay off. Ask customers where they heard about your business. Monitor the response rate of different ads and dump the losers. If you are paying to participate in a leads group or networking organization review the amount of actual business from these sources. Don't pay to hear the same dozen people introduce themselves week after week.

Consider learning new systems. Do you have a time management system? How about long term goals or success strategies? Now is the time to invest in your personal and professional development. Make every minute count by using the best methods for business and creating more time for your personal life. Start by doing an Internet search, browsing the library or bookstore to see what's new and what appeals to you. Check out your local community college for free or low cost business training. Create a like-minded group of entrepreneurs to coach and encourage each other.

A recession doesn't have to be the end for your small business dreams. However, you will have to be creative, flexible and exercise personal discipline to come out on the other side in sound financial shape. Tough times help you decide what's important enough to spend limited funds on and what's not. A tight budget can be the inspiration for new ideas, products and strategies. By staying focused on your customers and staying open to new approaches you can come out of a recession with a healthier business and a feeling of not just survival but accomplishment.

Karen Southall Watts is an entrepreneurship and management trainer. Karen travels all over the country to teach workshops to new business owners and leaders. Her new workbook for couples in business is available at http://www.sexisgoodforbusiness.com You can reach Karen at http://www.karensouthallwatts.com

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