If you feel like the average US small business, you are more optimistic now than in November. The City Business Journals Network conducted a survey, reported here in the San Francisco Business Times, [full survey results here] that interviewed American small businesses and found they were more optimistic in January than in November, but still very concerned about the economy and feeling very cautious about expanding their business anytime soon.
Challenge = Opportunity
Even economic storm clouds have a silver lining, and despite what appear to be some of the USA's worst economic conditions in a generation, there remain many ways for small businesses to capitalize on the opportunities and the advantages that small businesses have over larger, less innovative, and less flexible operations. Here are a few reasons you should be optimistic about your small business future, and use that optimism to seize the new opportunities that great challenges always bring.
First, let's take a look at what the survey found small business owners are planning to do as the immediate economic crisis stabilizes:
39% Buy down credit lines
37% Look for new products and services
34% Increase Capital Reserves
32% Re-assess existing business plan
28% Re-engineer/find less expensive ways to do business
27% Hire new employees
Somewhat optimistically the survey also found that only about 15% of the businesses surveyed felt they'd have to sell out as a result of the economic crisis.
Small Business ... Rules!
Let's take a quick look at a second set of more general reasons small businesses can remain optimistic about their ability to weather the economic storm and come up profiting again:
Real estate values have come back down to earth: Have you been leasing your business space? Renting your own home? Many believe we are beginning to see some of the best real estate deals in decades, and as the government begins to focus on making credit more easily available you should be looking very carefully at how real estate and loans impact your small business. Tax issues can become complicated for those who use a house for both business and living, but in many cases you can now buy homes for costs approaching half of what you would have paid for identical digs just a few years ago. Brand new businesses with young owners who have never owned a home should look into the Federal Government stimulus package benefits for first time home buyers. Details on that program are expected in March 2009.
Big firm layoffs can bring expertise to small firms: Working in the banking or investment sectors? As the huge Wall Street firms consolidate or collapse they have produced tens of thousands of unemployed high-end executives and workers, some of whom might be a great match for a middle sized business that is growing or needs insights into Wall Street or doing business with the federal government.
Federal Government Expansion: The federal government is about to spend more money than at any time in US History, and whatever your philosophical view is about the wisdom of the stimulus plans, your business should be prepared to deal with how this type of spending may affect *your own* economy. If you produce products or services for the health care, transportation, or other infrastructure sectors, make sure you follow how the coming massive spending may impact your business. Can you scale up quickly to meet huge short term demand that could be followed by dry spells? Are decision makers aware of your products and services?
Employees should shine:
Small business can enlist employees as ambassadors of good will easily, and working on this angle can help you separate your loyalists from your slackers. The new business economy will have less wiggle room for uninspired workers to settle into unproductive niches where the paycheck is their only inspiration. If your employees are not reflecting back the respect you show to them, maybe it's time to give somebody else a chance.
If you've got more time on your hands from the contraction of some business, put that nervous energy to work on the company blog, website enhancements, and social media strategies you have been putting off. Blogging and social media does not require specialists, and any small business owner can gain cheap and large expsosure simply by interacting with customers and potential customers online. Need advice? Check into the articles on social media strategy here at the Insight Community for some great recommendations.
Use creative borrowing to get at the cheap loans:
Even as short term bank loans have become harder to get and have run into almost usurious rates, personal home borrowing on equity lines and mortgages is creating some of the cheapest money in a generation for those with good credit. This is likely to continue for some time as Government is dedicated to a massive increase in liquidity and low interest rates. Consider borrowing off your own home at low rates rather than taking out high interest loans - although it's a good idea to consult your tax advisor and/or lawyer about this because this may reduce your business interest deduction or have other legal implications.
The sun always rises on the American dream, and small business remains a bastion of economic strength, hope, innovation, and prosperity. The storm clouds of economic catastrophe are starting to blow past us, and now it's time for small business to shine.