SBDC Advisor Newsletter Fall 2008 – Issue Spotlight: How to Thrive in an Economic Downturn



	in this issue SBDC News & Information SBDC Helps Researcher Gain $3.5 Million to Develop Power Packs Consultant Profile: George Boehm How to Thrive in an Economic Downturn Results of SBDC’s Defense Assistance Felt Ten Years Later Food Businesses Require Prep Time to Succeed Steps to Start a Specialty Food Business Capitol Views SPECIAL ISSUE: Presidential Candidates Forum Congress Working on Improvements to Small Business Innovation Research Bill Awards Events Educational Programs First Step Workshops Educational Programs Want More? Get the Advisor in your Inbox Download PDF SBDC Services Return on Investment	How to Thrive in an Economic Downturn By Ruth Hughes, Director, Wilkes University SBDC Many SBDC clients, such as Keystone Pallet & Recycling shown here, have seen the payoff from energy upgrades. Rising costs, declining consumer confidence, tighter access to credit and financing – times are tough for small business. However, small businesses in any sector should take this opportunity to make changes that will benefit their business in the long run. In fact, many of the tips to survive ( and thrive) in an economic downturn contain the same advice that SBDC consultants give clients to engage in smart, efficient growth at any time. Reposition your business to take advantage of your most profitable product or service and therefore improve your gross profit margins. Ideally, your organization should have been engaged in strategic planning before any difficulties, but if not, now is the time. Communicate the realities of your business situation with employees to minimize morale issues from misinformation. You should also solicit input and engage employees in any repositioning efforts. Not only are they key stakeholders in the change but they also have access to valuable customer information that should guide any repositioning and are the resources you need to fuel continuous improvement.
	The latest survey by the National Federation of Independent Business of small businesses showed optimism slipped, establishing one of the longest strings of recession level readings in the survey's history. “Bootstrap” your business and remember that your goal is to maximize cash flow. Maximizing cash flow requires reducing costs as well as increasing cash flow. Among other things, implementing tip 1 should also increase cash flow for the business. Call your SBDC to schedule a site visit with an environmental management specialist who can assist your business with an energy audit to reduce those costs. SBDC business consultants can also work with your business to identify other costs savings, both long term and short term. Examine your organizational structure and consider employee reduction. Make sure that you keep staff that you need to preserve the company’s ability to meet those needs that customers value most. Consider alternatives to layoffs such as freezing salaries, temporarily reducing benefits or temporary reduction in hours. Make sure you are following tip 2 as you implement this phase. Change is never easy for a business and you may need to make significant changes to your business in order to meet the challenges of the current economic downturn. You should view these changes as positive developments for your business and embrace the opportunity. To locate your local Small Business Development Center for specific help, visit www.pasbdc.org/where.