East Portland Chamber of Commerce

As a business owner, I too worry about making payroll, paying the bills and having a little money left over to reinvest back into my business.  Investing in the stock market is like riding a roller coaster only for some the ride has cost tens of thousands of dollars.  For this reason, our consumer based will tighten their belt; but that doesn’t mean your business has to suffer.  Recessions can be a time of incredible business growth, but it does require a pretty big mental shift!

First a few numbers, I always feel it helps to know I am not alone in my struggles.  There are 25 million small businesses in America, 90% of which have 5 or fewer employees.  If I may be so bold, all 25 million of us have an advantage over our bigger business counterparts, we can compete on price better than they can.

During recessionary times, consumers trade loyalty for price.  Commerce will still happen, but with very tight budgets and cost controls the vendor with the best price will win.  That doesn’t mean you should lose money on your deals, but you may need to find ways to sweeten the pot in order to swing the deal in your favor.

Consider bundling products and services together.  For example, I’ve recently rolled out a new retractable banner stand package.  The first display lists for $249, but add a second display for only an extra $150 and a third display for only $100 more.  $499 for what could be a full backwall display is ultra affordable in my industry.  What can you do to bundle services or lower prices?

Here is a list of six things you should do during a recession:

1. Hold on the cash
2. Don’t borrow
3. Defer capital investments
4. Postpone hiring
5. Lower your prices (bundle where possible)
6. Increase your marketing

This list was given during a Small Business Management class at the Clackamas Small Business Development Center by Thomas G. Jones, Ph.D.

Over the next couple of weeks I will share my class notes with you and cover what Dr. Jones saids about working through the recession.

Number one, hold on to cash.  Obviously you shouldn’t put these greenbacks under your pillow.  Now is the time to talk with a financial planner.  We have several finance people in our chamber and they would be excellent resources for you to find the best and safest ways to manage your cash until times get better.

If the advice is good for you, then it is also good for your current customer based.  You have good relationships with your existing customers, call them, spend time with them, discount your products and services so they can gain more value from what you offer.  Your current customer based will be tempted by other service providers, but you have the edge over the competition.  Keep your edge, stay in contact.

Number two, don’t borrow. Good news, you probably can’t borrow anyway, but if given the chance, don’t do it unless you must do so to keep the business running.  Now is not the time to go into debt, now is the time to let the economy settle out.  Leo Tolstoy said, “Everyone things of changing the world, but no one thinks of changing himself.”  This recession is built on bad debt, don’t add to it by going deeper into debt.

to be continued…

Ed Bejarana
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