The Upside of the Downturn

About the Instructor

Cathy Hagan is Area Director and Certified Business Analyst at the Small Business Development Center at UNF. For more than 15 years, she has been providing training and one-on-one management assistance for prospective and existing business owners, helping them meet the challenges of today and prepare for future opportunities.

Presentation Outline

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The Latest on the Economy (0:14)

1. Reduced credit lines
2. Layoffs at epidemic proportions
3. 18 percent of US household wealth sapped -- WSJ
4. Record foreclosure levels
5. Lower real estate values
6. Low consumer confidence
7. The Stimulus - Where are we along the pipeline?
8. ARRA
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The Downturn and Small Business (0:24)

• Credit market freeze changes the borrowing rules
• Weaker demand for products and services
• Decreased profits
• Slower collection of receivables
• Higher owner personal debt
• HR, employment challenge

Competition from new entrepreneurs

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Opportunities (0:36)

• Weakened competitors
• Top-quality employees
• Loyalties loosened
• Government procurement
• The Economic Stimulus - What it means for small business.
  • SBA lending initiatives overview
  • Stimulus grants??
  • “Shovel-ready”, construction, infrastructure and energy initiatives
• Trends/Opportunities
  • Export
  • Niche - anything practical - integrating “now”
  • Entertaining - diversions - “insperiences vs. experiences”; cocooning
  • Aging baby boomers
  • Pets
  • Health
  • Innovation
  • Construction
  • Anything green - save environment, save energy, save money
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Financial Strategies (1:25)

• Cash is KING
• Manage your margins
• Renegotiate debt
• Seek supplier and contractor discounts
• Monitor the creditworthiness of your customers - and THEIR cash flow
• Timely invoicing and collections
• Prepayment incentives and discounts on long-term buys
• Curtail unnecessary expenses and unprofitable activities
• Protect your credit
• Reduce, eliminate or charge for convenience services
• Nurture your lender relationships
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Operations Strategies (2:40)

• Adjust processes, expenses and inventories to current level of sales. 
• Negotiate expenses – rent, telephone, advertising contracts, etc.
• Reconsider insurance needs and shop for better rates
• Use open book management; create employee awareness of their relation to bottom line.
• Recruit the best talent you can afford.
• Invest in your employees (and yourself) with training opportunities.
• Consider reducing work hours in lieu of a layoff.
• Outsourcing vs. in-house.
• Get smart about estimating and bidding.
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Marketing Strategies (3:28)

• Network, network, and network.
• Assess the effectiveness of your marketing.  Eliminate what does not work.
• Consider increasing marketing budget, not decreasing.
• Resist temptation to lower prices; instead, create added value.
• Diversify revenue streams.
• Nurture your existing customers.
• Expand the definition of your target market.
• Hug your customers.
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SBDC Tips and Tools

1. Marketing tips: www.famee.org
2. Managing financial strategies: Fiscal and Optimist
3. Evaluating business model: SMART assessment
4. Information: Hill Search
5. One-on-one counseling: Chamber circuit ride; site visits
6. Government contracting tips http://www.sba.gov/contractingopportunities/owners/index.html

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