Small Business, Big Opportunity

Editor Nicole Wisniewski We have all read the headlines … “Bear Stearns and Lehman Brothers Become Insolvent” … “Citigroup Trades Beneath a Dollar” and “General Motors Files for Bankruptcy.” Big firms have dominated the news for the past year – so much so that it is easy to forget how important small businesses are to the overall economy.

Small businesses have had a rough ride. “With unemployment the highest it has been in many years, consumers today are focused on what they truly need vs. what they want,” explains Dr. Gene Huang, chief economist at FedEx.
“That’s a negative for small businesses like landscape and lawn care companies, which are much more sensitive to cost-cutting than large enterprises. Making matters worse are tight credit markets, which make it tough for small businesses to extend financing to their customers or borrow against future earnings.”

These factors, among others, have contributed to 2008-2009 being perhaps the worst period for small businesses in almost 30 years, according to the National Federation of Independent Businesses, an organization with 650,000 members. Its recent survey showed optimism among small business owners was the lowest it has been since 1980.

Even if 2008-2009 is the “worst of times” for many small businesses, given the cyclical nature of economics, the stage is being set again for the best of times, according to Huang.

“The credit markets are tight, that’s true, but the employment base is excellent,” he says. “There are many highly skilled, hard-working people who can help you start or build a business. Commercial rents are low. There is affordable space to start a new venture, and assets of all kinds are at lower prices. Technology – information technology and the Internet – continues to enable and accelerate the growth of new business.”

With these factors in mind, here are four things Huang suggests you consider as a small business owner:
 

1. Measure and examine the validity of your services and business. Be realistic. Focus on what’s working.
    
2. Think of the needs vs. wants equation. Some rebound is happening but consumers are still worried. For the foreseeable future, “must have” services are going to do better than the “nice to haves.”
    
3. Leverage technology to grow and gain efficiency, but don’t block out the older consumers. Yes, younger generations are computer-savvy, but there is a large portion of the population that likes to buy things the old-fashioned way. Don’t ignore this pool of sales.
    
4. Surf the curve.  Look at the trends and see what is working at larger companies. If you are expanding a business or getting ready to start a new service, consider emerging opportunities.