19 Ways to Survive in a Tough Economy. Lynn Spry

      

      19 WAYS TO SURVIVE

      Small-Business Strategies for a Tough Economy

      Lynn Spry and Philip Spry

       Self-Counsel Press

       (a division of)

      International Self-Counsel Press Ltd.

      USA Canada

       Copyright © 2012

       International Self-Counsel Press

       All rights reserved.

      Introduction

       A storm is looming on the horizon, the clouds are an angry gray, and the rough water is tossing the ship around like an eggshell. The ship’s captain could turn back and wait for clear waters and mild winds, but that would mean losing the investment in this voyage, not to mention the lavish rewards for completing a successful trip. So the intrepid captain chooses to press on and weather the storm.

      An equivalent to this brave and audacious captain is the entrepreneur who takes on the challenge of running a small business. The obstacles are large, but the rewards are even larger. A successful small business can propel the owner to financial freedom very quickly. Through franchises, taking the business public, or simply adding more stores, small-business owners have the chance to succeed in ways that most people working a nine-to-five job will never see. Owning a business is risky but the rewards are significantly greater. If it’s done right, business ownership is the opportunity to make more money than any job can ever pay.

      In these tough economic times, with unpredictable gas prices, a depressed real-estate market, and rising employee costs, the minor problems your business has had can be magnified many times. You may have already started to see the impact on your business. Maybe your sales have slowed, customer traffic has dwindled, or when customers do come in, they don’t spend as much money. Your products and employees are becoming more expensive. Even if your business has been running successfully for years, it can be impacted. This isn’t an isolated problem and you are not alone.

      Some people will choose to shut down their businesses while others will sell and hope they make enough money to retire. Those worse off may simply close their doors and walk away, ignoring their debts and obligations. However, some people will face the challenges head on and, like the successful ship captain, they will prepare for the storm and ride it out. They will redesign their businesses to become successful during this tough economy. These redesigned companies will be well positioned to grow once the crisis is over.

      You may be wondering how a small business can grow during this difficult time. It may be challenging, but it can be done. After all, many large companies were in this exact position at one time or another. This book was inspired by the challenges our own small business faced. In early 2006, in Arizona, at the height of the real estate boom, we purchased a small computer store: Arizona Computer Outlets. At that time, houses were selling for 30 to 40 percent more than the purchase price; within two or three days of being listed, sometimes within hours. The store was thriving in a market in which home equity loans were inexpensive and people had more cash than they could spend. Within a few months, the environment changed dramatically.

      As interest rates increased, the Phoenix housing market began to tumble. Consumers who had adjustable rate mortgages on their homes saw their monthly mortgage payments rise dramatically. Their disposable income shrank as a larger percentage went to paying for their houses. As if that weren’t bad enough, higher gas prices restricted consumer spending even further. By December 2006, sales in all industries were slowing and as a small local retailer, we felt the pressure of a slow holiday season.

      Over the next seven months, store sales continued to slow, until we hit rock bottom in July 2007. The store lost more than $9,000 that month alone. We knew we needed to make significant changes, but had very few solid ideas on what to do. We found that many books discussed opening a new store, but there were few resources targeted at turning around a small business. We knew that to stay afloat, we needed to change. Desperate to survive, we contacted other small-business owners, read all the business and management books we could find and, by September, had the start of a plan to recover our business.

      Within six short months the business had turned around, even though oil prices had reached new highs and home prices had fallen more than 10 percent. Pundits around the country were starting to discuss the possibilities of the country entering a recession, but at Arizona Computer Outlets things were very different. New customers were coming in based on referrals alone, profits were up, and expenses were down. February 2008 was our best month ever, even beating the month we bought the store!

      The store’s net revenue had increased almost 90 percent from the July 2007 lows and the store turned a profit of almost $7,000 in February 2008. Sales were now in the pipeline and on the last day of February, we had $25,000 in sales ready to be closed in March. We had turned our business around and two years later, in July of 2009, we expanded to a second location.

      This book documents the lessons learned from hundreds of hours of research and experimentation. It summarizes the advice and examples of other successful small-business owners as well as our own experiences. This book outlines exactly what you need to do to stay afloat in a difficult market. With tried and true methodologies to increase sales and improve customer service, you can grow your business even in tough times.

      Many small businesses are still facing economic challenges, but you can turn your business around and successfully navigate through these troubled waters. Once you do, you will be well positioned to take advantage of the next economic boom. Remember, no storm can last forever. In the past, companies that have made it through difficult economic times have often gone on to become significant players when the market improved.

      When your business is struggling, work on building, changing, and growing your business. Remember your goal: You wanted more or you wouldn’t have bothered starting your business in the first place. Your small business can become the stable, profitable company that you want it to be.

      Take a moment to relax and think about how things started. Remember back to the day you first dreamed of having your own business. Think about the anticipation you felt when you decided that you were going to do it. At that time, you probably knew a few people who owned a store or company and they were very successful. But they didn’t start out that way: they were all just average people who wanted something better and worked hard to get it.

      When you remember back, you probably think about the success you anticipated, the loyal customers, the brand you would create, your picture on the cover of Entrepreneur magazine, and most of all, the financial freedom! More than anything else, those goals were what you were trying to achieve and that lifestyle is what you wanted as your reward.

      Your goals for your business are what drive you every day. This is why you go to work each morning and why you keep your business open during the tough times. This is the dream that you wish to achieve, the security you will provide for your family, and the freedom you will enjoy.

      One of the biggest challenges you will face is figuring out what the best route is to achieve your goals. When you first started, you may have created plans, products, and processes that were designed to grow your business. However, as your business grew, you may have discovered that you had to dramatically change things in order to keep your business running.

      As you read this book, you may find it challenging to replace your existing ideas with new ones. In our business, change was one of our challenges. It wasn’t until we were faced with almost losing our business that we realized we had to change to survive.

      In order to make the changes your business needs, you have to be brutally honest with yourself. As a small-business owner, you have