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Small business profits – threat or opportunity

Written by: Russell Bowyer

Article Overview: Turn-on your television or pick up a newspaper and all that is reported right now, apart from the present swine flu problem, is the "credit crunch" - falling house prices, rising unemployment, businesses going bust, repossessions, bankruptcies and more... So what should small businesses do? Well this depends on whether you see this as an opportunity or a threat. There are no doubt certain businesses that will find these times more difficult than others, for example, only today there are reports about how the number of unemployed lorry drivers has gone up almost 5-fold since this time last year. Where businesses are selling less and therefore resulting in a less of a need for transport, then transport companies will see a dip in demand and as a consequence might need to make redundancies.

Small business profits – threat or opportunity

Turn-on your television or pick up a newspaper and all that is reported right now, apart from the present swine flu problem, is the "credit crunch" - falling house prices, rising unemployment, businesses going bust, repossessions, bankruptcies and more... So what should small businesses do?

Well this depends on whether you see this as an opportunity or a threat. There are no doubt certain businesses that will find these times more difficult than others, for example, only today there are reports about how the number of unemployed lorry drivers has gone up almost 5-fold since this time last year.

Where businesses are selling less and therefore resulting in a less of a need for transport, then transport companies will see a dip in demand and as a consequence might need to make redundancies. So I accept that times are tough and even more so for some - take solicitors and estate agents - with the dramatic fall in house sales their business income relating directly to house-sales will have fallen off a cliff over the last 12-18 months. However, take an estate agency - if they don't already do so, the estate agent should consider moving into property rentals, as people are resorting to renting their property instead of selling.

By looking at the present economic situation as an opportunity and to start looking at ways to make efficiencies within any business you should be able to survive and along the way make more small business profits - doing nothing is not an option and will result in a business failure. You can ask your staff to take a pay cut so that they help in the survival of the business and you can then start to look at other ways in which the company can make profits from existing customers, by looking at other product lines that compliment your existing ones.

I suggest that you look at putting together a meeting with all your staff with the main or sole purpose of getting ideas from them on how to move the business forward. Before the meeting make it clear to all staff what the purpose of the meeting is and that it is to be a constructive review of the business and its activities.

The benefit of doing this with staff is that they all know the business and when you get a group of people together you end up with an "Idea Snowball Effect" in other words - one person might suggest one thing, which in itself might be a good idea, but if not it might lead someone else on to an even better idea - and so on...

You might even want to offer incentives to staff for the best ideas and for those that start producing results or alternatively, place a marker in the sand of where profits are now and then offer a group bonus based upon any profit increase whereby things improve.

Another way to move things forward is to ask your customers for ideas and feed-back. You can organise a "Client Forum" whereby you invite a number of clients in (I recommend 10-12 customers) and sit them in a room and ask them for feed-back on your products and/or services. It is amazing what can come out of this type of meeting, which can ultimately lead to providing a better service to your clients and they might even give you ideas for other products of service - thereby increasing your business profits!

Whilst improving profits - don't forget to keep an eye on cash flows - it is all very well increasing your business profits, if you don't get the money from your customers and keep cash in the bank.

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Article Tags: bankruptcies, business profits, consequence, credit crunch, difficult than others, falling house prices, lorry drivers, moreso, small business, small businesses, swine flu, television, transport companies, unemployment



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