Business Management Veteran Offers
Suggestions for Survival in Stormy Economy

Small business and technology advisor Barry White (not the singer), who wrote the following article, brought nearly three decades of business management experience to his current post as director of the SBTDC at Missouri University of Science & Technology in Rolla. He spent 25 years in retail management with the Army-Air Force Exchange Service at military bases from Minot, N.D. to the Philippines.

Here, White offers a bit of advice to small business owners and operators to help them weather the current storms buffeting the local, national and world economies.

Barry White (center) attended the recent MO SBTDC and MO PTAC Client Showcase at the Capitol in Jefferson City. Flanking White are Mike Koenigstein (left), an MS&T SBTDC client and showcase participant, and Malcolm Townes, a business commercialization specialist with the SBTDC in Rolla. Koenigstein runs Pro Perma Engineered Coatings LLC, a tech company aiming to develop a process to greatly improve the corrosion resistance of rebar and other steel construction products.

In my prior life in the retail business, we frequently experienced severe challenges to sales and profitability. Those challenges could be as straightforward as a sudden deployment of troops from the military installations I served, or as chronically debilitating as the slow draining of financial vitality caused by a major economic downturn like the one we saw in the early 1980s.

The repercussions of those challenges could be drastically immediate or severely drawn out, but we always found a way to make it through. We did so by maintaining our business vision while also adapting to changes in the business environment. So here are some suggestions to help enterprising owners and operators of small businesses successfully face today's challenges.

• Get back to the basics: Down and dirty, what did you do in the days when you started the business to get those first calls or first customers? Return to that time of service and focus.


• Cut unproductive frills: If you've instituted a change in the business that does not generate revenues or improve the bottom line, drop it immediately!


• Bump up the advertising: The worst thing you can do is stop marketing in a down market. People need to know how to find you. They need to know you have the deal or item they are looking for. Have you ever known people who didn't think they got a deal when they bought a car or truck? Marketing.
  
  
• Study the statements: If you are not looking at your profit and loss statements constantly, you are out of touch. Get your bookkeeper to prepare a P&L weekly to review expenses if you have to, but focus on it. Don't be reluctant to show your employees; they need to know what to look for as well as understand the situation. As leaders, if we fail to talk, people tend to fill in the blanks by making stuff up!


• Take a pay cut: Personally, before you cut anyone else's pay, start with yourself. In fact, don't cut pay, cut people, if you must cut. This sounds Draconian, but shed the least productive people you have rather than spread a pay cut among everyone else. It's a morale saver (for those who survive the cut) to eliminate employees rather than cut pay.


• Build an advisory team: You don't have all the answers, so don't be afraid to bring in outside opinions, peers or even others who have gone under. Learn from their mistakes.


• Train your employees: Training is usually viewed as an extravagance and is the first thing to be cut when hard times hit. But it's the best single thing to ensure you keep the customers you have. Start with customer service and sales. Your customers cost a lot to get in the door the first time, so it's tough to lose them. The things they are looking for in tough times are value, price and customer service.


• Focus on your business: You are not alone. What are other businesses similar to yours doing? Study, read, whatever, but be an expert in your line of business and don't be afraid to steal the ideas of others. Go outside of your area and talk with others about what they are doing, and don't be afraid to share some of your ideas that are working.


• Predict or project your finances: Go short-term or long-term-or both-but develop a worst case scenario of cash flow. Then plan on what you need to improve on your projections. The point is ... know your numbers!


• Get on the sales floor: Be visible, talk with customers, ask questions and then listen to their responses and needs. Also, simply observe. What are people buying? What do they seem to think long and hard about as they shop?


• Focus on the immediate: What do you need to do right now to get to where you are going? Go in the office, close the door, turn off the phone and computer. Get out a pen and pad. Write down where you want to be in 10 years, if everything were possible. Take a new page, write down everything you want to see happen in your business in the next five years. On another new page, write down everything that must happen in the next year.


• Finally, title the last page: What do I have to do in the next two weeks to get to next year!

Start doing it!

This story was featured in the March 2009 newsletter