Small businesses are the backbone of the American economy. According to the Small Business Administration, small businesses are responsible for generating 64 percent of net new jobs over the past 15 years. And in his latest stump speech, President Obama called small businesses “the places where most jobs begin.”
Despite their value, the nature of small business makes them particularly sensitive to a volatile economy. Millions of U.S. small businesses — especially in the retail, business services and housing industries — were made vulnerable by the recent housing slump and credit crunch, causing potential customers to tighten their purse strings and making it more difficult for small businesses to obtain loans and credit. Therefore, the question becomes, how do small businesses survive during a down economy—especially when they’ve already cut costs as far as they can go?
Should you be one of these businesses, there are some things you can do to stay afloat during this tumultuous time:
Reduce your prices. Because people have less disposable income during tough economic times, they are less likely to buy nonessential items. Therefore, should you want your small business to survive, you may have to cut your prices. As stated above, because a small business does not have a lot of expendable capital, lowering prices may be difficult. However, if cutting prices will cause customers to maintain their shopping habits with your business, cutting prices is a good idea as long as you still maintain a profit.
Invest in a web presence. In a down economy, one of the best marketing tactics is to invest in your website. More customers are moving online to find the products and services they are looking for. Small businesses that can’t be found online or through local searches are missing out on potential business. Getting your own web presence is also very easy. Many companies even offer website hosting packages that cost under $5.00 per month.
Get financial help. When money is tight, it makes financial sense to enlist a professional’s help. On Call Accountants is a full-service accounting and bookkeeping firm that offers professional bookkeeping, accounting and business management to small, mid-size and rapidly growing businesses. Their experienced accountants help manage your finances and identify opportunities for improving profitability.