Small Business Saves the Day

We have been in this recession long enough that some things are becoming clear about the recovery that is just beginning.

• It’s a ‘soft’ recovery. This means that it is a very gradual, mixed recovery, with some sectors of the economy, notably the stock market  and housing, on their way up, and other factors, most notably the job market, still on bottom.
• This recession has been like no other. It hit companies large and small so hard that some previously fundamental ways of doing business have changed. It has driven companies to use technologies more fully, and to redesign their workforces to achieve productivity with fewer people. Many lost jobs will not come back.
• The biggest driver for the U.S. economy has previously been personal spending. But, with fewer jobs and reduced incomes, many people are not able nor inclined to spend; they are stretching and saving instead. So this recovery is going to have to find its footing on a different foundation than before. Small businesses may be that foundation.
• Although small businesses were hit very hard by the recession, more of them are starting up now than ever before. It’s that disappearing job thing; when you can’t get a job from someone else, it’s time to invent your own.
• Small businesses are usually able to be much more agile and adaptable than large ones. It’s like the difference between a rowboat and an ocean liner… one turns on a dime, and the other needs a lot of time, resources and room.

So, if you own a small business and can hang in there and adapt, the future may be yours.

What does that look like?

• It is not necessarily true that you are  in trouble if your business is consumer-related (the no-jobs/low personal spending  thing). Think small banks versus big ones. Small community banks are booming all around the country, while many big ones remain mired in their troubles from a year ago. You can still do business with consumers, but you have to reach them in different ways, and you may very well have to reinvent any or all aspects of your business so it is relevant and sure-footed in the emerging economy.

• Strategic partnerships between small businesses are excellent pathways to success. What other business could mutually complement yours? If you sell telephones, for instance, how much better could you do if you team up with someone who sells broadband? If you’re selling financial services, what would happen if you team up with a bookkeeper?  Insurance companies and collision repair shops have known the power of strategic partnerships for a long time. Now the rest of us need to think that way.

• It’s a great time, if you’re doing OK and your competition is suffering, to go for it and gain market share. Apple is a good example of this. Computer sales overall are sharply down, but Apple, with its iconic and popular product line, is doing quite well, thank you. They have launched a huge initiative — right now when the computer market is suffering — to turn people on to Macs and gain market share. They are going for it big-time.

Above all, resist all the negativity about the economy out there. The gloomy nay-sayers are so tuned in to bad news that they’re blind to the good.  It is a wonderful, perfect time to unleash your creativity, reinvent yourself and your business, set up dynamic strategic partnerships, and thrive. Many small businesses are doing that now, right in the middle of the recession.

Are you ready to join them?

Doug Hickok, CEO, Institute for Provocative Leadership doug@IPLsmallbusiness.com