Good Business in a Tough Economy
Good Business in a Tough Economy
For one who has survived tough days before, now is the time to put your business on the right path to be in the right position to maximize growth when the current recession ends. For small businesses and startups, that means getting the basics-such as accounting and legal services- right from the start, according to small business consultant Kelly Scanlon.
Kelly Scanlon has run her business consulting firm for 13 years. So the current economic crisis is not completely unfamiliar.
"We've seen the tech bubble, we've seen the housing bubble, and of course we saw the downturns that followed them," Scanlon said. "What you need now is good advice if you want to grow a good strong business with a solid foundation. You need good advice all of the time."
So when the Wall Street financial bubble burst last September, Scanlon considered delaying the scheduled rebranding of her company, which was coincidentally set to kick off at the same time.
"I asked myself, 'Are people going to think we're nuts?'" Scanlon said.
She decided to make the move despite the financial meltdown. The campaign centered on a new name for her firm, "Thinking Bigger Business Media." She is glad she did.
"A lot the companies we serve are small, but they have their sights on becoming bigger," said Scanlon, an executive with NAWBO (the National Association of Women Business Owners) "They are thinking bigger. We adopted that as our theme, and its really striking a chord in the community. Small business owners are brainstorming and saying 'we must think bigger, we must think broader.' Every time they do that, they're invoking our brand."
Her educational publishing and media company offers a variety of products for businesses, an electronic newsletter, a speaker series, publications, a website with articles focusing on small businesses challenges, even webinars - with everything designed "to help connect small business owners with resource strategies that will help them to grow to the next level," Scanlon said.
"We educate them on what's available out there, on strategies and on resources. There are various small business development centers. We have products that help small business owners hook up with information on management, technology, and legal issues," Scanlon said.
Government statistics show that 86% of all American businesses have 19 or fewer employes. Key concerns for startups today include getting good basic advice on specialized issues, such as finance and the law. And it's an Internet world now, one which requires familiarity with and exploitation of social media, Scanlon said.
"In this downturn, we are seeing more startups. People who are laid off think now is the time to follow the dream. Others do it out of necessity. They can't find a job, so they figure they'll drum up some business and become consultants," Scanlon said. "Often they know a particular skill, but they don't know how to run a business. "
The correct approach is to surround yourself with resources and people "who know what they're doing. That doesn't mean go out and hire a bunch of employees. There are small business centers that offer advice, and who can help fill in the gaps."
Legal and accounting expertise can be critical in building a strong foundation. "Whether you chose to do business as a C corporation or an LLC can cost you a lot of money in the long run if you make the wrong decision," she said.
Scanlon pointed out that because small business owners accumulate most of their wealth in their business, other legal considerations can come into play. She cited pending legislation which would reinstate the federal estate tax, which was due to expire at the end of 2009. The concern is that businesses that run in a form that allows for "pass through" of taxes wind up with inflated assets, because business income becomes identical to personal income. That could drive estates containing more family businesses into the arms of inheritance tax collectors - a critical concern for older business owners.
She considers the social media "a phenomenon" that no business owner, of whatever size, can afford to overlook. Scanlon said that face book and Twitter allow businesses to make contact with people "you never would have had access to before."
"Its amazing what you find out if you are out there every day. You can get a lot of competitive intelligence. You can form relationships very easily, because it's a lot more open platform," Scanlon said. Which also poses a hazard: "You have to be very careful about not letting those things manage you. You have to have a strategy, you have to be very disciplined in terms of how you mange time."
It's also time to redouble your networking efforts, through trade and industry groups. That's an investment of time that pays back many times over, Scanlon said.
"Times are bad, but in spite of that, you can overcome this," Scanlon said. "You can find the right strategies to put you on the right path to being in the right position when the recession ends, to really accelerate your growth."
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