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Small business success in a recession

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As big manufacturers continue to fold or lay off hundreds of people at a time, most small businesses will face tough odds for survival. However, there are some businesses that will thrive. How will these small businesses manage to grow while other companies are falling prey to a recession? The answer may be simpler than you think.

The key to small business success in a recession is exactly the same thing that helps businesses succeed in a great economy. A savvy business owner (whether large or small) looks for opportunities to grow his or her business and then makes sure to position the business so it can take full advantage of these opportunities. A smart small business owner will not let the economy dictate the position of his or her business but will decide how to use the current economic situation (whatever that may be) to continually reposition the business for success.

One example of how small businesses are using the recession to thrive is the housing market.While the news is trumpeting that many people are losing retirement incomes or going bankrupt as the housing market continues to sour some small real estate businesses are growing faster than ever. While big businesses are losing millions small businesses are capitalizing on an opportunity. In fact, these businesses are booming. Because of this repositioning to meet the market some real estate lawyers and realtors are so busy they can barely take time to sleep. This is because they have changed the focus of their businesses to foreclosure or refinancing work. In addition small real estate investors are scooping up tax lien properties and then flipping them for a quick profit to people who want to rehab and rent homes. Handymen and contractors are getting in on this new area and now are teaming up with the rehabbers to do low cost renovations that bring the properties up to code. Scores of small businesses have gauged the market and made the necessary changes in order to continue to be profitable.

The key to this is that small businesses must be essential in order to survive.Too many small businesses focus on ways for people to pamper themselves or are based on the idea that busy people need help. But if the economy turns than all those people with disposable income are short on cash and the first thing to go is the planned vacation to the Caribbean. That may mean they do not need a pet sitter or a travel agent after all. The savvy business owner understands this and repositions his business to be able to provide what people are looking for-essential services.

So once you are willing to make the changes you need to survive in a recession where do you start?Here are some questions to get you started-

  • Is your core business product or service essential?Be realistic when you examine your product or service line.Do you provide something that people cannot do without no matter what the economic climate?If you do good for you-if not its time to make a change.

  • Are there product lines or services that have been on the backburner that you should now pull forward?If you have been shelving a product that you think may not do well in boom times a downturn in the economy may be the signal to put this on the front burner.

  • Do you make a product or service that has an essential off shoot?For example while people may curtail their spending on any particular product they often will continue to maintain a product (especially something high ticket).Can your business make a change to maintaining the products you sell in order to boost productivity?

For small businesses that can adjust quickly to changing times and are willing to seize opportunities, a recession does not have to mean disaster. Many times small business are able to make changes quickly and adjust to the market better than a large business that is weighed down by bureaucracy.In fact, those small business owners who are willing to adapt may find that their businesses continue to grow right through the recession.

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