If you’re a true entrepreneur, then, as Donny Deutsch, creator of CNBC’s The Big Idea states, “No is not an option!”

You may be incubating your dreams of a better product than those currently offered….so don’t talk yourself out of it!  Don’t listen to the non-believers or the nay-sayers who tell you what a lousy time this is to start a business.  It’s nothing personal…..they’re just projecting their own fear onto you.

 Not only can small businesses survive and thrive during the economic downturn; these small businesses can be the driving force for economic recovery, according to Stephen Betts, at the Proceedings of the Academy of Entrepreneurship. 

As of March 2009, the United States has fulfilled the definition of a recession - two successive periods of negative growth in the GDP and an increase greater than 1.5% in unemployment (Black, 2008). 

Due to many factors, the small business owner is dealing with the effects of the economic downturn.  Under financial distress, small firms behave erratically  (Pinadad, Rodrigues & de la Torres, 2006) and sometimes frantically (Lober, 2009).  A decrease in capital expenditures and profits is typical (Monte & Castillo, 2009). 

As may be expected, as layoffs increase, so do start-ups of small businesses.  Although there is a stimulus package this time, only $730 million in funding is for the Small Business Association.  Congress left out tax change provisions that could have saved many US small businesses (Robinson, 2009). 

The current paradigm has shifted from helping small businesses to preventing small business shutdowns (Heerwagen, 2009). 

Message:  Be Your Own Stimulus Package

Bottom line:  Small businesses are not beholden to Wall Street (Bandyk, 2008).  In past recessions, it has always been small businesses that drive the economic recovery. 
How can your small business be one that thrives and drives?

Two approaches: 
Defensive strategy - go into survival mode 
Proactive strategy - re-engineer your processes
Though both approaches cut costs, re-engineering prepares you for recovery and innovation.

KEY TIPS  FOR SMALL BUSINESSES TO THRIVE, SURVIVE AND DRIVE THE ECONOMY

First, be defensive and make sure your business plan is operationally and financially sound.

1.  Review your contracts, suppliers (and their businesses and   customers), customers, laws and industry regulations, capital structure.
2.  Examine and change business processes as needed
3.  Re-train and upgrade your workforce - especially management and think of your company as being a ‘pool of talent.’
4.  Review how any changes you make, effect your business valuation,   exit strategies, partnerships,  terms of all contracts and agreements.
5.  Then…Think about approaching investors - they still need to invest in great, well-managed companies.

 The next blog will focus on adopting a PROACTIVE market orientation that will not only help your small business thrive…..but DRIVE the economy out of recession!

Stay tuned…..and please offer your suggestions for what is working for your business.

Rosalie