Smart Business Strategies for Surviving the Recession:

Strategies that small businesses need to manage the recession are completely different from those of large companies (Corporations). However, this is not to say they cannot find models that are fitting the small business characteristic and that are effective at making small businesses survive a recession. Many of my small business clients are struggling during this recession and they have been asking me – “What can I do to avoid going under during this difficult time. I always tell them you must have smart strategies. And the next question is always ‘What does this mean?”. The most important thing to understand is that there are five strategy categories or perspectives from which a business can choose to develop their strategic actions i.e. Management oriented strategies; Business Resources oriented strategies; Knowledge oriented strategies; Business Operational/Internal Systems oriented strategies; or External Environmental oriented strategies. This is very simplistic, but practical presentation of strategy, but the main point is to illustrate here that as a small business, you need to be aware of your strategic choice orientation in order to be clear about the intentions and significance of your strategic action objective, impact and outcomes or results.

Comparatively, large companies usually focus on macro-level strategic actions such as economic indicators trend and downturns; i.e. focus on rates of business growth vs. growth in absolute terms; focus on what is happening on their quarterly profit and lost statements because they are accountable to their shareholders; results in post-effect interpretations; Cost retrenchments – i.e. cutting jobs to in order to reduces HR expenses (in a small business for the most part they already operating with limited manpower capacity so there are no job to cut- and may end up laying off employees they need to actually maintain their operational efficiency –sot this is not a best alternative, but a last resort); Strategic re-engineering – as large organizations they are not as flexible, agile and quick to change their structures, processes, objectives, performance measures and/or incentives because of their entrenched business routines and automation (Frederick Taylor)


On the other hand, Small business strategic choices should focus on micro-level indicators that take into account small low-cost incremental strategic actions guaranteed to yield high results, impact and return on investments.

(1) Revenue/cash inflow strategies i.e. focus on cash flow statement as an indicator for what’s currently happening to the company’s cash inflow; this allows the business to primarily focus on strategies that are cash inflow oriented because this is what’s likely to keep them in business during the course of the recession; monitoring cash flow statement instead of being preoccupied with the profit and loss statement is important because in a recession there are going to be loses because of the slump, the idea is to survive or weather the recession till the economy starts to pick-up. However it does not mean they ignore controlling cash outflow causes or strategies, but the questions is which ones have a sustainability impact in the meantime;

 
(2) Revenue diversification strategies i.e. focused on revenue generations strategies not revenue reallocation strategies. Revenue retrenchment is not always the best way for small businesses to save their companies because they need strategies that bring in revenue flows; cutting cost is only a measure for recycling the same money already in the business so that you can direct it to priority areas or appropriate budgets so that you can stay in business – it is a maintenance strategy and not a revenue generation strategy. Focus on what are other services the business has the capacity and capability to provide without incurring additional cost of doing business in order to generate supplementary income while the core services are not paying or bringing in the revenue that they need to be bringing.

(3) Market/Service/Product mix Objectives: reassess the business objectives (maybe goals) – that would help the business adjust to the prevailing economic conditions. An example would be focusing on Market/services or product MIX strategies: and there are many alternatives a business can pursue in this strategy – i.e.:
• Assessing core service/product offerings; alternative/complementary services/products; and markets i.e.
• Old services/products to new market
• New services/products to old market;
• New services/products to new market base

(4) Strategic alignment: because of their small size small businesses/companies are quick to shift and have the agility to respond to external changes like an economic slump; therefore is just as important for them to look at their structures, processes, performance measures and/or incentives.

(5) Structures: Internal and external business structures. What are the internal & external operating structures and how do they impede or enhance efficiency and effectiveness; how can the business structure be modified to align with ongoing changes without necessarily “compromising” the core business model; What are the reporting structures and how do they impede or enhance decision making – change to participative management (Douglas McGregor –“The Human Side of Enterprise) where decision making authority is dispersed rather than the hierarchical management; this requires maybe redefining job competences and levels of occupational authority as well as accountability so that employees are able to have a common understanding of the business goals. Seeking and incorporating “unusual suspects” as strategic partners or alliances –Seeking out the intangible assets of the business.

(6) Processes: what are the processes in place and how do they incurred the cost of doing business; the objective is to find hidden “bureaucratic” or “red tap” business processes (e.g. technology mediocrity to non-value adding networking routine) so that they can be modifies to reduce the cost of doing business; what aspects of the doing business processes can be outsourced rather than be maintained in-house: keep in mind that in a recession all business are suffering and this presents an opportunity for negotiating favorable rates because they are willing to attract business also to stay afloat;

(7) Performance measurement – this goes to the earlier point that small businesses use their cash flow statements to measure performance rather than their profit and loss statements; other measures that they can take into consideration are tied to their operational processes e.g. in-sourcing vs. out-sourcing; in terms to time management - the level of your employee rate of productivity should not be based on when they punch in and out on the clock, but by what they produce while they are at work. It also ties into having efficient processes and procedures.

(8) Incentives – give or negotiate with your employees; strategic partners and suppliers or everyone on your supply chain the incentives that will maintain them or such that they continue wanting to do business with you.

Original Copyright @ Tuesday May 26, 2009 at 11:40pm (FB), Edited January 27, 2011 by Dr. Tendai Ndoro begin_of_the_skype_highlighting  end_of_the_skype_highl(DocNdoro) – Founder, SLIPPA/Brighten The Corner Foundation; CEO EDCTrainers, LLC.

TO THE ANCESTORS

Do you think of your ancestors – Ancestors dead and living that made you who you are today? I find that as I outgrow being young, I think of the ancestors -the  ancient,  modern and immediate that influenced my  life, my decisions, my world view, that helped defined the person I am today and shaped my life’s direction. Whether it was a great fortuitous positive influence, or whether it was a painful negative drawback, somehow the ancestors - a random encounter with Spirits you did not choose to impact your life,  are a part of who you are today! Involuntarily, they have made you be the person you like or don’t like to be here and now.

As I sit in my kitchen this evening, I started thinking about those ancestors that influenced my life.  My ancestors were not ancient or modern…they are more immediate, far removed only one to two generations away. My grandfather, who was a man ahead of his time, even before feminism was “in vogue” and believed that only through education can a girl child, especially an AFRICAN  girl child, expand the options of her universe, and thus imprinted that virtue in my DNS, my mind, even my skin, from as way back as I could remember. As a result today I stand here with a PhD after doing it twice! Yes twice! Having finally conquered as a Warrior of higher education in the battlefield prejudiced against mature post graduate students! Because of him, I have the privilege of choice and know that no matter what my destiny I will survive!

I think of my brilliant father, who never went to college; could not go to college even if he had wanted to, because the chains of extended family responsibility consumed him, but who despite his own smoldered dreams, empowered me, gave me my tenacity and my voice! Who taught me about the world of power – covert and overt – how to manage it; how not to abuse it or toy with it; and how to stand up to it no matter what the circumstances! My ancestor father, who also taught me never to swallow my soul and told me that it was okay to explore the options of my universe as long as I understood and accepted that there was the price to pay for that choice as long as the price be worth the salvation; Who preached the wisdom of his philosophies and told me that civility is not a sign of weakness, and taught me to brighten the corner where ever I was and not wait for some deed of great at some point in time! For both my maternal and paternal grandmothers who showed me by example and without words not to settle for anything less and thus taught me to wait till the right one comes along, and the right one comes along!

And for my living ancestor, my Mhamha, who with her intelligence could have become a Samurai in any profession she choose, yet embraced being  an RN because other choices were not within her reach because she was born a generation too soon. Instead she is a Samurai in her duty as a mother and her faith such that she banked so many prayers for me and my siblings, my blessings continue to overflow. By watching her example, she taught me about the power of faith! Thus I do acknowledge one timeless ancient ancestor - above all else my Almighty, who shows me every day that only through faith are all things possible.

I say thanks to the Ancestors for being the Spirits that made me to be the person I like ME to be today.

Copyright @ March 3, 2011 by Dr. Tendai Ndoro begin_of_the_skype_highlighting  end_of_the_skype_highl(DocNdoro) – Founder, SLIPPA/Brighten The Corner Foundation; CEO EDCTrainers, LLC.