Business Tips For Surviving The Financial Crisis, Part 1 of a Series

This is the first in a series of posts I will be making on doing business during tough economic times. Hope you enjoy reading and that it will help you see your business through this financial crisis.

Let’s face it, times are tough, and they will get tougher as the financial crisis we are in will likely get worse. Even if the bailout works, it will take months, if not a year or two before we start to see a positive impact, perhaps even longer if decisions made make the crisis worse.

During a financial crisis, as with other calamities businesses need a plan in order to see the crisis through. There are many things businesses can do to take action in order to survive the tough financial times ahead. Some of these decisions will be hard calls to make, such as worker layoffs or declaring bankruptcy, (Chapter 11) which allows for restructuring.

One thing that is important to remember is not to have knee-jerk reactions or make sudden decisions without thinking them through which generally will cause overreaction. Overreaction will require further steps to correct any bad decisions and may also lead to overcorrection.

The second thing you will want to avoid is not taking any action at all. Act, but act decisively with consideration about how each action will affect the business both in the short and long term.

Another thing to consider which you can act on immediately without incurring any costs, especially if you are operating as a sole proprietor is to treat the business as a complete separate entity. Larger businesses do this without even thinking about it, but small businesses run as by sole proprietors have a different structure and often do not think in these terms.

The reason you want to think in these terms, is you want to ensure the survivability of your business, and you need to start thinking in terms of its survival. The only time you should not be thinking in these terms are if you are going to sell it off, or simply just end the business. I won’t touch on these topics however.

Since the crisis will likely deepen from the lack of lending, and extend to credit cards, and other areas of our economy. Our next post will be about creative financing for your business, and will include ways to come up with cash, increase cash flow, and make smart cuts that will lessen the amount of money leaving your business. In these posts that follow on this subject expect lots of links for your reference and more content than I typically place into a single post.

The next post in this series will come later this week, for now take some time to watch two videos below from Mike Michalowicz a very successful entrepreneur, and author of The Toilet Paper Entrepreneur, the tell-it-like-it-is guide to cleaning up in business, even if you are at the end of your roll. After the video's check out his site.

Start & Grow a Healthy Business in a Recession from Toilet Paper on Vimeo.

Entrepreneur Strategies For Growing In The Down Economy (Part II) from Toilet Paper on Vimeo.