When the going gets tough, small businesses can get going

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Business man jumping over obstacles a manager race concept. Overcome obstacles concept. Man jumping over obstacles like hurdle race. Business vector illustration.

The Australian economy is in a slump, with the economic growth rate dropping in the last four quarters to rest at its lowest in a decade at 1.8 per cent. Considering the knock-on effects impacting consumer spending, small businesses must be innovative and find ways to remain competitive to ensure their survival.

Small businesses tend to have lower survival rates yet, they play a significant role in the Australian economy. The small-business sector accounts for almost half of employment in the private non-financial sector and over a third of production. Importantly, they contribute to local economies by bringing growth, innovation, jobs and income to their communities. It is therefore important for the health and sustainability of local communities that small businesses continue to thrive

While small businesses may be less resilient than larger firms during sluggish economic periods, they can better adapt to changes in the economy thanks to their size which makes them more agile, and because most of their business comes from local customers who largely prefer to “buy local”.

When the going gets tough, small businesses can get going. Customer retention is pivotal, especially in tougher economic times. Adding value is one of the best ways of ensuring that your customers do not stray. As a small business owner, you should carefully consider what your customers need and think strategically about how you can deliver this to them seamlessly and at a fair price.

Focus on optimising your levels of customer service, making it easy for people to source and pay for your products and services, getting to know your customers better and personalising their experience. The customer experience is what keeps them coming back, even when money is tight.

Here are my tips for surviving, and even thriving, during the economic downturn:

  1. Define your mission and goals
    Think about why you started your business in the first place. What is it that you want to offer? Who are your customers? What do you want to achieve?
  2. Regain your focus
    Your focus may shift from time to time, but you cannot lose focus. Define your core business, understand your core customers and focus on what you are good at.
  3. Determine who your customers are
    Determine who your customers are and focus on servicing them. Avoid straying from your core business, overextending your resources and putting in more effort than would be required if the customer was a good fit to begin with.
  4. Remember no man is an island
    You cannot do everything yourself. Nurture a strong team to build a robust and sustainable business. Your people are your business’s most important assets – treat them that way.
  5. Cashflow is king
    Identify the products and services that are costing you money rather than earning you money and don’t do business with customers that take their time to pay or don’t pay at all.
  6. Service, service, service
    Never let service slip. Great service differentiates one business from another that has the same offering. When the going gets tough, dig deep and find ways to improve service levels.
  7. Get a business coach
    Find a business coach for objectivity and guidance. A business coach is there to provide you with guidance, bounce ideas off, offer impartial advice and help you to regain focus

Milton Collins, business transformation expert, ActionCOACH