Struggling small businesses need to get into position for growth in 2011. The economy is showing a slight comeback, providing much needed breathing room for companies to look ahead to the future. That does not mean small business owners can rest on their laurels and expect profits to roll in. The economic upswing provides just enough respite from surviving the recession to make a plan on growing profits.
1. Do Work In-House
Small businesses often have small amounts of capitol to work with and cannot always afford work contracted out. The next time you have a job that would normally be contracted out to another business, take inventory of your staff’s skills.
Waitressing for a new restaurant just out of college, I casually mentioned I could design the new menus they needed. My journalism education had been heavy on design software. You may already have someone on-hand who knows how to fix minor computer malfunctions, write brochures or take photographs. Give your employees or yourself a chance to use or develop hidden skills.
Not only does this save your business money, by utilizing someone already on payroll, it enriches your company’s skill set. The more skills you or your staff have, the more capable your business is.
2. Pay Off Debts
Many small businesses that did not go under in the recession have accumulated debt. Resist the urge to spend profits on non-essential expenses and pay down that debt. A too high debt to loan ratio will ding your credit score, preventing the business from obtaining any loans needed for growth.
Dealing with properties to sell and rent out, I would have liked to spend money relocating a rental property bathroom. I won’t because I know that money would be better spent paying down the mortgage, improving chances of getting additional loans for more homes. That decision better positions my business for future growth.
3. Cut Costs, Not Employees
If your business is still struggling, go over every expense and trim costs before letting employees go. It is infinitely easier to buy more things, than it is to replace trained employees who are vested in your business’ success.
Keep office supply ordering to a minimum, be selective and practical about inventory and do not purchase items that will not return a profit (like a new office chair or fancy signs).
Honestly evaluate if the actual workspace can be downsized. Can you move to a smaller building or office suite? This could save on rent and utilities. Can the extra space be rented out to other businesses as offices or storage?
4. Harness Social Media
One sure way to grow your business is to tap into your customer base. With the social media explosion, there is not a better (or cheaper) way to do this, than online. Create free company Facebook and Twitter pages. Use free blogging sites like Blogger and WordPress to give your company an online presence.
This is especially beneficial for small businesses whose local populations may be in the habit of visiting chain stores. These costumers may never think to visit your business on their own and this puts your product and promotions right in their daily social stream. Better customer targeting than a newspaper ad.
All you have to do is share the business page with your online network and have ask your employees if they would mind doing the same. Then those people can choose to share with their extended network and so on.
5. Have the Right Product, Right Price
Just because the economy is turning around doesn’t mean customers are willing to easily part with cash. Signs are pointing to more conservative consumer spending. This means products that are necessities are selling while luxury goods are not in great demand.
Make sure your business is offering an essential good or service, at an affordable price. Keep abreast on your competition’s price points, because costumers are comparison shopping now more than ever.
Keep on ear to business news, insiders and suppliers for spending trends. Your business should be poised to grow in the direction of that spending.