Peter Birkeland boasts a Ph.D from the University of Chicago, but the management consultant didn't need any special training to come up with this tip for small business owners looking for opportunity in the current down market:
Tap into your “free” resources.
“In every organization—church, school, business—there's something called ‘free' resources,” Birkeland says. “They reside within your employees. These people work for you every day, and many of them have ideas about how to do things better, but there's never a forum for sharing that.”
Birkeland sees entrepreneurs—who President Obama said create the majority of the nation's jobs—as a very special breed. Most entrepreneurs don't have a backup, don't qualify for unemployment.
“It's do or die,” Birkeland says. “Those are the people I typically end up consulting with. There's no safety net for those guys. For them, it's not really a recession. There's no tightening of the belt necessary, because they have already done that.”
But that extraordinary vulnerability brings very special opportunity, Birkeland says. The entrepreneur may now have the chance to really think about tactics and strategy.
“They have time for important things. Do you have a vision? Is everyone in your company aligned to that vision? Most people don't have a vision, because they're mostly operational. They roll up their sleeves and get the work done. Their days are filled with a ton of activity,” Birkeland says. “But that vision can be really, really important. You'll never build a great company if you don't have a good vision. You can build a good company by focusing on the fundamentals, but you can't have a great company.”
That advice applies equally to all sectors. The businesses that have held up during the recession are in the energy area, wind power and biopower, Birkeland says. The business of pure technology companies, in general, is not off by much. He cited one company holding steady that provides monitoring equipment and sensors for data centers and effectively ensures the safety of multimillion dollar computers. But even the sectors that are especially hard hit—development, real estate, restaurants, and some travel businesses—have the same opportunity to reappraise.
If you're an existing company, this economy gives you tremendous opportunity to basically rewrite your company to exploit how the market is changing. I do strategic planning and we've been able to totally go back to the drawing board,” Birkeland says. “If you were to start your company today, you'd do it completely differently. You can revolutionize your company.”
A survey of business owners conducted by the Credit Research Foundation in Fall 2009 showed that 90% report that the economy has had a direct negative effect on their business, up from 77% in November 2008; 81% say their customers are experiencing tightening of bank financing, up from 68% in November 2008; and 65% report that they are experiencing a slowdown in customer payments
Such an economy makes it unlikely that entrepreneurs and startups can cut costs quickly enough or increase sales fast enough. Instead, tap into those “free” resources and consider rewriting the rules.
“You have the chance to rethink who you are and what you're trying to accomplish, and how to do about doing it,” Birkeland urges. “You can discard the old rules and come up with something clever and innovative.”