-- Q: The stock market meltdown is frightening on many levels, but for my small business it could be catastrophic. What now? — John
A: No one likes to see the glass as half-full more than me, but this is no time for a rah-rah, "Let's think positive!" cheer-you-up column.
No, the truth is, we are in a heap of trouble, my friends.
Watching one's retirement portfolio greatly diminish is frightening enough, but equally bad is anticipating how a severe economic downturn might effect your business and figuring out how you are going to survive.
Here's what I think you need to do now:
Hustle, and then hustle some more:However it is that you get customers, do it, and then do more of it. And then keep doing it.
• If it's an advertising campaign, keep it going, and even consider expanding it.
• If it's cold calling, call more.
• If you network, join more networks and get out there even more.
Why? Because the sad truth is that some of the people who buy from you now are going to stop buying from you in the next six months. Either they will have gone out of business, or they will find your goods or services cheaper elsewhere, or they will be tightening their belt and will cut back on whatever it is you offer.
Whatever the reason, expect to lose some important customers. As such, you have to start replenishing the coffers now.
80-20 your customers and products:The 80-20 rule will be more important now than ever. Remember who your most important customers are, your vital 20% that create 80% of your income, and kiss their tushies. Offer more, for less, take care of them, given them great service.
And while you are at it, work at targeting customers similar to your best ones. Think about how you landed your best customers and recreate that effort, wooing other potentially great customers.
Lower your prices:In the coming days, everyone will be looking for a bargain, so consider giving them one. Even sellers of high-end goods are going to be caught in the upcoming economic squeeze, and their customers too will be looking to save.
Have a sale. Lower some prices. Give away some time.
Keep your overhead low:You do not necessarily have to cut expenses now, but you should at least create a plan for how and where you will cut back if necessary. If you have some employees that might need to be let go for example, put a plan in place (for yourself) as to how their work will get done, and by whom.
What about moving to cheaper digs?
Note: Whatever cost-cutting measures you employ, just be sure not to cut back in those areas that get you business, especially your advertising and marketing.
Institute some shoestring marketing:When times get tough, you have three options for keeping things afloat: You can cut back (see above), borrow (good luck!) or make more.
Increasing your sales need not be overly expensive. There are all sorts of inexpensive shoestring marketing methods available. (In fact, over at my website, MrAllBiz.com, I have a webinar explaining many of them.) The important thing is that you try out some new, affordable marketing methods so as to keep the 'ol cash spigot open.
Team up:Now is also a good time to consider forming some strategic partnerships with like-minded entrepreneurs. You can share the cost of the endeavor, you can share the labor, and you can also share contacts and customers.
The good news? I have been writing this column for over 10 years now, and this is the third time I have had to write about a recession (after the dotcom bubble burst, after 9/11, and now).
We made it through then, and we can make it again.
Today's tip:Another good practice now is to get invoices out promptly, and make sure they are paid promptly. When people start to juggle, as they will, you don't want them thinking that you are one of the ones that they can easily put off.
Ask an Expert appears Mondays. You can e-mail Steve Strauss at: firstname.lastname@example.org.And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.