"Tips for Small Business Survival In This Challenging Economic"
presents “Tips for Small Business Survival In This Challenging Economic Climate” Thurs. November 13, 2008 8-10AM Club 101, 101 Park Ave. Marketing Tips Presented by: Wendi Caplan-Carroll, Regional Development Director, Constant Contact www.constantcontact.com 1. Don’t Panic. Take ten deep breaths and focus. As crazy as it may sound panicking leads us to make careless decisions that lack strategy and focus. Recessions, unfortunately, do occur. But, we also know that with fortitude and a take charge attitude, our businesses (and personal financial life for that matter) will weather the storm. History shows us that recessions end. Good times will be upon us again, the big question of course is when. 2. Keep up the entrepreneurial spirit. Being an entrepreneur has more risks, but also more rewards then traditional big business. Understanding and reacting to business drivers is what small business owners do every day. Big business has a harder time reacting. They tend to hunker down. Small businesses have been the growth engine that has pulled the US Economy out of previous downturns. 16 of the 30 corporations that make up the Dow Jones industrial average got their starts during the recession. Disney (1923-24 recession) Hewlett-Packard (Great Depression) Microsoft (1975 recession) MTV (1981 recession) IPOD (2001 recession) 3. Continue to market, but spend smarter. Marketing should be considered an investment, not an expense. Marketing is what brings you the leads, generates sales and keeps you top of mind. Cut it and you cut your profits. Smart companies keep marketing using cost effective tools like email marketing to build stronger relationships. Email marketing is the least expensive mode of marketing with the greatest return and it gives small business owners a quick and easy way to measure the effectiveness of their campaigns. 4. Understand your objective and have a strategy in place. Whatever marketing you decide to use, think ahead and have a communications strategy in place. Think about your product or service and how often your customers use it or buy it to determine how often to communicate and in what matter. Take a look at the calendar to decide what information to communicate and when. Take the time to plan the next six months or even the year. Things may change, but your plan will give you a strong foundation to build from. 5. Stay focused. Typically, a down economy is not the time to be launching a new product or offering, but instead it’s best to focus on marketing your current offerings aggressively as it’s more expensive to launch new products then to market current offerings to the marketplace. If you do launch new products, those that are cost effective or non-luxury are likely to be more successful. In addition, it is of the utmost importance to stay focused on customer service. Often increasing your customer service doesn’t cost you anything but pays back in return visits and increased sales. 6. Tap into your existing customers for more revenue. Existing clients are the best source for more business. Provide value to them. Be the best you can be. Continue to build your brand and trust with them. E-Newsletters are a great way to show your value and stay top of mind. 7. Ask and listen to your customers. Your customers are your single best resource and even informal feedback can be highly beneficial. Know what is on their minds to continue to be relevant. You need to adapt to their changing needs. Small business should take advantage of online surveys to tap into their customer base to find out how they can service them better. Small businesses that get to know their customers are more likely to retain those customers in the long run. 8. Fine-tune and build your customer list. It’s quality not quality. Make sure you have in-store and online sign up. Ask permission to contact them. 9. Band together with others. It’s cost-effective and will help you reach a wider audience. 10. Understand what you are spending and the contribution to your business of each dollar you spend. Understand and create a plan that will give you maximum impact and the highest Return on Investment. Spend, but spend smart! Tax and Accounting Tips Presented by: Gerald Marsden, Partner, Eisner Lubin, LLC – www.eisnerlubin.com 1. Do not over react - learn, assess and plan. Most important have a plan before taking actions. 2. Speak with your accountants, financial planners and investment advisors. 3. Plan for year end - unlike most years economic conditions and potential changes in income tax law will require additional focus, planning and timing decisions. 4. Learn the details of your investment results to date and projections to year end. If you have investments in funds or partnerships know what is realized and what is unrealized. 5. Meet with your professional advisors regarding your pension plans (IRA’s, Keoghs etc. to plan contributions, investment strategies etc.). This should include discussions as to Roth IRA’s focusing on the rules effective in 2010. 6. Meet with your accountant and speak about your company’s year-end audit and how current economic conditions might affect the scope and cost of the audit. 7. Review your budgets - personal and business and revisit your long and short term plans and expectations. 8. Review your debts - focusing on cash requirements, renewability of existing loan arrangements, covenants and alternatives. 9. Review the internal controls in place at your business, focusing on the fact that downturns in the economy increase fraud risk. 10. Be focused and be flexible. Sales Tips Presented by: Heather Brighton, The Brighton Group www.thebrightongroupinc.com 1. Do you or your sales team have the most up to date skills and core competencies to sell in a down market? Emphasis should be placed on creative and innovative strategies. You need to create a more focused and customer-centric sales team. Salespeople need to utilize all aspects of prospecting to meet as many end users and referral sources to secure new business, and to modulate all probing, presentation and closing skills to meet the needs of prospects in the current environment. 2. Go back into your database and create a list of people you have not spoken to in a long time and begin reconnecting. Make sure you are spending time with Centers of Influence: Individuals who have influence and contact with many people. Their influence comes from geographical location, political groups, civic or business associations or some other position of prominence that gives them recognition. A center of influence is someone who continues - over a period of time- to give you the names of prospects and helps to reach them. To qualify as centers of influence, individuals obviously must have influence and contact with many people. 3. Use online social networks as a means to prospecting: Linked-in, Facebook etc. 4. Presentation skills (benefit selling) will need to be sharpened accordingly. As salespeople, you must know your customer’s needs and concerns. Make certain your probing skills are up to date and you are utilizing new ways to uncover needs. Probe to find out what their deepest problems are that you can solve with your products and services and the implication of those problems are on their current business. 5. This is the time to expand your business potential through creation of strategic partners and joint ventures. 6. The sales team antenna should be fine tuned to identify market trends, consumer buying patterns including competitor intelligence 7. Industry segment: This is the time to start expanding the industries that you currently serve. Move out of your comfort zone. 8. Cross-sell all products/services to your existing client base. They might not be utilizing all that you have to offer. 9. Customer Relations: It is important to review customer satisfaction measures to ensure that the company is meeting their changing expectations. 10. Negotiation Skills: Be prepared to upgrade your negotiation skills in tough times. A negotiated solution is advantageous only under certain conditions, that is, when a better option is not available. Four concepts are important for establishing a negotiation framework: • The Best Alternative to a Negotiated Agreement (BATNA) is one’s preferred course of action in the absence of a deal. Knowing your BATNA means knowing what you will do or what will happen if you fail to reach agreement during the negotiation. • Reservation Price (also referred to as the walk-away) is the least favorable point at which you will accept a deal. • The Zone of Possible Agreement (ZOPA) is the range in which a deal that satisfies both parties can take place. • Value Creation Through Trades: This takes the form of each party getting something it wants in return for something it values less. Employment Tips For Small Businesses Presented by: Keith Markel, Esq, Dickstein Shapiro, LLP www.dicksteinshapiro.com The following is a sample list of do’s and don’ts to provide you with a brief overview of how to keep your small business out of legal trouble: 1.Do make sure to classify employees properly under the FLSA. Make sure all employees are properly designated as exempt or non-exempt with regard to the Fair Labor Standards Act. In accordance with the Fair Labor Standards Act and state wage and hour laws, be sure to also pay the appropriate amount of overtime (i.e., one-and-one-half the employee’s regular rate of pay) to all non-exempt employees who work more than forty hours in any given workweek. 2. Do make sure to pay employees properly. Make sure you are paying the current minimum wage to all employees in accordance with federal and state law. Currently, the minimum wage in New York is $7.15 and the federal minimum wage is $6.55. Be sure to post these minimum wage guidelines in your establishment in a place where all of your employees can see them. 3. Don’t take illegal deductions. Make sure only proper deductions are being taken from each employee’s paycheck. 4. Do Ensure proper breakfast are being taken by employees. Encourage employees to take their meal and rest periods. The period of time an employee is entitled to take for a break depends upon the amount of hours and the shift they worked, and should be calculated in accordance with applicable state law. 5. Do make sure not to misclassify employees as independent contractors. Make sure that anyone working for your establishment is correctly classified as an employee or independent contractor. Unlike employees, independent contractors, are not: (i) protected by anti-discrimination statutes, (ii) subject to the FLSA, (iii) covered by worker’s compensation, and (iv) subject to tax withholding. 6. Do keep proper records in case you find yourself investigated by the Department of Labor. Be sure to record all hours employees work and all salary and overtime paid to each employee in an organized fashion. 7. Do provide safe working conditions. The Occupational Safety and Health Administration provide guidelines to ensure that all employees enjoy safe working conditions. Be sure to follow these regulations and keep them posted in your establishment in a place where all of your employees can see them. 8. Don’t discriminate against employees. There are a number of protected categories, which employers are prohibited from basing any adverse employment decisions on under both federal and state laws. For example, Title VII prohibits employers from discriminating against any person with respect to their compensation or other terms and conditions of their employment on the basis of that person’s race, color, religion, sex or national origin. New York law also protects an individual’s opportunity to obtain and maintain employment without discrimination because of age, race, creed, color, national origin, sexual orientation, military status, sex or marital status. All employers should post an anti-discrimination policy in a place where all of your employees can see them. 9. Don’t retaliate against employees. If an employee files a complaint with regard to wages, overtime, discrimination and/or safety conditions do not treat them any differently or threaten to fire them based on their complaint. 11. Do have clear policies and consult with an employment attorney. An employer’s exposure for violating any of these types of laws can be significant. Recently, a New York federal court awarded a group of plaintiffs (consisting of eleven waiters, busboys and captains) close to one million dollars in liquidated damages and attorney’s fees after their employer, a small restaurant in New York’s Chinatown, misappropriated tips and violated other provisions of federal and state wage and hour law. This employer may have avoided having to pay liquidated damages had they demonstrated their subjective good faith and objective reasonableness with respect to plaintiffs tip claims. However, the court found that the defendants could not establish that they acted in good faith or with objective reasonableness since they had not taken any active steps to determine whether they were entitled to retain a portion of the tips. Had the employer sought consultation to determine whether its practices were in compliance beforehand, their liability would have been significantly reduced. Although the steps to take to ensure compliance may seem daunting or unnecessary at this time, avoiding a potential lawsuit may very well be worth the time and effort expended. Finance: Tips for Keeping Your Cash Flow Strong Presented by Betty McCain, Citibank www.citibank.com 1. Consider giving a discount to customers who send their payments via ACH. 2. If possible consider asking new customers to make incremental payments. For example, you may want to ask for the first third to be paid before work begins, the second third at a key milestone such as the delivery of a product or service, and the last third 30 days after completion of work. 3. If property values are down in your area, try renegotiating your lease to secure a lower rent. 4. Hold off investing in leasehold improvements or other non-cash assets. These types of assets are difficult to convert into cash and can’t be used as collateral for loans. 5. Even if you business is financially strong consider securing a modest credit line that can help smooth out your cash flow. Finance: Tips for Protecting Your Revenues 1. For any customers that represent a large concentration of your total receivables, consider purchasing domestic or international receivables insurance. This coverage typically costs less than 1% of your receivables and is available through a variety of credit insurance sources. 2. Vet new customers by running a thorough credit check through a reporting agency, such as Dun & Bradstreet or Experian, to ensure that your new customer has a track record of creditworthiness. 3. Encourage your customers to sign confirmed orders or written contracts, which protects your company against unwarranted returns or cancellations. Finance: Tips for Maintaining Access to Credit 1. Review your company’s credit rating on a regular basis, through D&B, Experian and other reporting agencies. If you see unjustified reports of late or delinquent payments, contact the reporting party to request a retraction. 2. Review your company’s covenants to make sure you are in full compliance and contact your lender immediately if a violation is on the horizon. Be prepared to show what corrective measures you have taken such as reducing your fixed and variable costs. Human Resource Tips Presented by Barbara DeMatteo, Portnoy Messenger Pearl & Associates Inc. www.pmpHR.com 1. Enhance your recruitment methods and image by being diverse and inclusive…it’s good business. 2. Train managers in how to conduct effective interviews to make sound hiring decisions. 3. Collaborate with employees and update job descriptions/clarify job expectations. 4. Improve retention rate of key employees through effective performance management discussions. 5. Document performance management discussions to support future employment actions. 6. Teach managers “people skills”. 7. Increase morale by focusing on each employee’s talent, skills and development areas. 8. Proactively communicate to avoid rumors, negativity and poor morale – have your facts straight. 9. Communications: Smile and connect with each employee directly. 10. Communication: Say thank you… a lot. Technology Tips Presented by Eileen DeVito, Microsoft www.microsoft.com 1. Learn From Other Small Businesses’ Experiences. Find case studies and videos online from small business experts and small business owners connect you with the information to understand what other small businesses are doing to sustain or grow their business more efficiently. 2. Learn How To Get The Most Out Of Your Existing Software Sometimes it can be easy to overlook training when you’re trying to cut costs and save money. But training doesn’t need to cost and it can provide an immediate return in increased productivity and job satisfaction. Self-paced, online, on-demand training from Office Online can pay significant dividends as you learn how to do everyday tasks more quickly and more efficiently. 3. Be Smart: Stay Informed And Use All Available Resources Be greedy when it comes to consuming whatever resources you can find. Whether that’s keeping up to date with the what other small businesses are doing just making sure you’re using your current software to its full potential, take advantage of everything that’s relevant and useful. 4. How to Buy Whether you're acquiring new computers or adding software to existing ones, it's essential to buy genuine software in the best way for your business. If you are buying more than 5 licenses for any mix of products for example, you could save money in comparison to buying boxed software. Or you may decide that hosted services would be more cost-effective. 5. Manage Your Cash Flow One of the challenges of running a small business is dealing with the feast-or-famine nature. That's not just about the flow of business, but also the flow of cash. Sometimes things get tight. 6. Learn about other small business experiences You want to stand out from the crowd and present yourself and your company in a professional, business-like and efficient manner. Take a look at the tools and resources available to help you differentiate your company in a difficult economic environment and to stand out from the crowd and present yourself and your company in a professional, business-like and efficient manner. Take a look at the tools and resources available to help you differentiate your company in a difficult economic environment. 7. Get the most out of your existing software Sometimes it can be easy to overlook training when you’re trying to cut costs and save money. But training doesn’t need to cost and it can provide an immediate return in increased productivity and job satisfaction. Self-paced, online, on-demand training from Online resources can pay significant dividends as you learn how to do everyday tasks more quickly and more efficiently. 8. Download Free Software Trials Free software trials provide a great opportunity to learn what new technology can do for your business. You don’t need to spend a fortune to get significant productivity gains and you might be surprised at how easy it is to make small changes that have a big impact. 9. Use office templates and clip art to design brochures and flyers Take advantage of pre-built templates and clip art for work, home and recreation. Your software programs often have business templates for just about every scenario; simply choose the one you want, download it, and you’re ready to start. Whether you want a presentation template or a picture for a newsletter, you can find free resources to help you create a professional image. 10. Get free website hosting and email addresses Sign up for software packages and you can be up and running in just a few hours. You don’t need any special knowledge or training – custom-built templates make it easy to build your website. And you’ll also get free company-branded email accounts to help you present a professional image to your customers.