Competitive Advantages for Small Businesses Even in a Down Economy

I know the economy is tough, and many small business owners are concerned about keeping afloat during this recession. But savvy entrepreneurs have some competitive advantages over larger businesses that they can use if they will just start thinking outside the box especially in the area of marketing. As larger businesses downsize and start to “turtle up” there are opportunities for entrepreneurs to exploit their natural competitive advantages to connect with customers in new and innovative ways. Here is a short list of what I consider to be perfect advantages of small businesses if they will just put them to work.

First – successful entrepreneurs have always known that they can’t be all things to all people instead they adopt a narrow market focus. By finding a small segment of customer they can create a strong reputation for serving a narrow market by finding a lucrative niche.

Second- Small businesses are much closer to their actual customers. They know the issues affecting their customers because it is affecting them as well and can alter their product or service to give customers what they need. By being closer to their customers they can easily create new products or services or change their offering bundles to help their customers.

Third they have better opportunities to partner with other businesses to create networks of strategic partnerships to help each other meet customer needs.

Fourth – without a large marketing budget, small business owners have an opportunity to use Guerrilla Marketing tactics, low cost even no cost innovative ways to establish real relationships and communications to their customers. Real marketing after all is nothing more than developing trust and confidence between the business and the customer to be mutually beneficial to one another.

Fifth – building on number 4, small business is personal. Customers and markets are hungry for businesses that allow them to connect to something beyond the product or service. Entrepreneurs who understand that first and foremost they are selling relationships can deliver a value story that has meaning to customers.

Finally – technology, especially using e-commerce and social media options can dramatically improve a small business’s ability to communicate with customers at very reduced costs in ways never before available. Even if your small business does not sell product or service over the internet, having a web presence is vital and using e-business tools to connect with possible customers has never been greater.

Yes, the economy is rough right now but instead of wringing your hands and hoping it will go away; savvy entrepreneurs are surviving, even thriving by capitalizing on their natural competitive advantages especially in developing innovative marketing opportunities. Share your thoughts about advantages small businesses have when it comes to marketing and developing business relationships.

Helping Small Businesses Succeed, Grow and Prosper In Independence County

Recently Tony Hammack invited me to become a regular contributor to the Voice of Batesville blog to discuss issues on business development especially as it impacted small businesses and entrepreneurs. This is a topic that is very near and dear to me and I happily accepted his kind offer. I recently posted a short article on cash flow planning for small businesses, but before I submit any other articles I should take a few minutes to tell you a little about who I am and why I am writing these pieces.

I am the Center Director for the Arkansas State University Small Business and Technology Development Center, housed in the College of Business on the ASU Jonesboro campus. The ASU SBTDC is partially funded by the U.S. Small Business Administration with matching funds from Arkansas State University. At the ASU SBTDC we have one mission – to encourage economic growth and development for small businesses and entrepreneurs in a 15 county area of Northeast and North Central Arkansas. My staff includes, myself, Herb Lawrence Center Director, Ms. Laura Miller, Business Consultant, Ms. Susan Glasgow Training Coordinator and Lois Travis Administrative Assistant.

At the ASU SBTDC we fulfill our mission through:
· Individualized consulting services to start up and existing businesses –
· Information assistance and market research –
· Small business training seminars.

Our consulting services and information assistance is all free of charge and completely confidential. My consultant and I will work with anywhere from 160 to 200 small businesses and entrepreneurs each year providing assistance with business plan development, market feasibility, business financial analysis, business valuations and loan packaging.

We also have a large proprietary database and on line reference library where we can help small business owners get answers to basic question, provide sample business plans, provide information about SBA loan programs, etc. On a typical year the ASU SBTDC will fill over 800 information requests.

Finally we conduct an average of 60 small business training workshops throughout our 15 county area on topics such as Starting A Business in Arkansas, Business Financing Options, Market Research, Guerrilla Marketing, Cash Flow Planning and more.

All of our consulting assistance and information research is completely free and confidential for any small business owner or start up in our territory thanks to our grant from the SBA. Some of our training seminars are also offered at no cost although others do have a registration fee usually between $35 and $49 dollars – basically to cover expenses related to the workshop.

It is not my intention to turn this opportunity to be involved with the Voice of Batesville into a marketing piece, but I did feel that it was important to give readers some background in who I am and how I help businesses succeed. If any readers would like more information about the ASU SBTDC services please feel free to contact me off-line (870) 972-3517, e-mail me at hlawrenc@astate.edu or go to our website http://www2.astate.edu/a/business/sbdc/index.dot for more information. Although my office is in Jonesboro, I am a long time resident of Batesville and generally work out of the Batesville Area Chamber of Commerce every Wednesday to work with small businesses in Independence County.

IT IS my intention to provide articles that I feel are relevant to small businesses and entrepreneurs on an ongoing basis from issues raised by our clients that should be shared with the larger community especially as they deal with the current economic situation. Here is where

I need reader feedback. After you read my article, there is a “comment” button at the bottom of the article. PUSH IT! Give me feedback. If you agree with the article, give me an “amen”, if you have questions about what was discussed or even disagree, let me know. Suggest other topics that are impacting your business that you would like to see posted, or just ask questions. If I can’t answer it, I will find relevant experts who can also contribute.

The purpose of this blog is to be an interactive and running commentary by and for small businesses in the region on topics that are affecting you and hopefully to help find answers that will keep your business financially healthy. So that means readers should feel free to join in.

Finally, the more folks that subscribe to this blog and join the discussion, the better… the purpose of social media formats like these are to bring people together that have common interests or problems and find solutions. Please feel free to encourage other small business owners, entrepreneurs, economic developers, lenders, etc. who you know in our community to subscribe to The Voice of Batesville and get involved in this blog. I look forward to hearing from all of you and hope you will find this blog enjoyable.

Sincerely,

Herb Lawrence

Keeping Cash Flowing in a Recession

by Herb Lawrence,
Center Director,
ASU Small Business and Technology Development Center
hlawrenc@astate.edu.

2009 is starting off as a tough year especially for small businesses as they deal with a recession, a credit crisis, and the fallout from the banking meltdowns. Add to the mix reduced consumer spending and it is spelling a real challenge as they try ride out the current economic downturn. No one knows exactly how long this recession will last; some economists expect it to go into late 2009 or even 2010. Cash flow management does not happen by accident, it takes careful planning and knowing all of your options. At the Arkansas State University Small Business and Technology Development Center some areas that we suggest clients consider include:

Talk to your banker NOW; discuss how they may be able to assist you with possible cash flow issues. If they can’t be there for you, consider alternative lenders.

Get monthly cash flow projections prepared now. Micro managing cash is critical to long term survival. Tighten your belt in ways that don’t show. Make internet calls instead of using phone carriers and e-mail documents instead of printing and mailing. Look at energy saving programs. But if you are already running out of cash then slash expenses as if your life depended on it. Reduce salaries temporarily, making sure you take the biggest cut. Get rid of every ounce of fat on your income statement, but keep muscle. Forgo raises and cash bonuses instead offer days off, early Fridays, flextime or other options.

Speed up collections from customers – Ask customers to pay in 10 days rather than 30 in return for a discount. If you can afford it consider offering 5% discount for payment within 5 days instead of the usual 2/10 net 30. Speed up cash inflow by asking for payment by credit card.

Renegotiate vendor relationships - Shop with other suppliers. See if your current vendors will provide a discount for early payment or by credit card. Your vendors are in this recession as well and may prefer some money to no money for their cash flow. If you are already in trouble, tell your suppliers and work out extended payments over a six to nine month period.

Liquidate inventory – Call it a “The Economy Stinks Sale” excess inventory that is not being sold does not bring in cash.

Sell off unneeded assets - look at any equipment, furniture or fixtures or other fixed assets that your business has that is not being used and sell those off if possible, even look at your personal assets.

How long the current recession will last is anybody’s guess, but careful cash flow planning to retain liquidity will be a must for most small businesses. The ASU SBTDC provides free consulting assistance to small businesses in Northeast and North-Central Arkansas. For more information about how the ASU SBTDC can help your business maintain liquidity call Herb Lawrence, Center Director or Laura Miller, Business Consultant at (870) 972-3517 or e-mail hlawrenc@astate.edu.

Israel - 'Land of Miracles'

For years the land of Israel has been known as the “Land of Miracles”. For the past six decades Israel has experienced miracles after miracles especially during times of war. Now is no different. In the past several years Hamas has fired thousands of missiles into Israel with relatively little precision. On Monday 5 JAN 09 Defense Minister Ehud Barak told the Knesset Foreign Affairs and Defense Committee that only two percent of Hamas rockets score direct hits in Israel.
Personally I see this as being miraculous and not just a tribute to the incompetence of Hamas. Of the attacks that have taken place, sixty percent of the missiles have fallen in open areas while 40 percent exploded in built-up areas. Of the thousands of missiles that were fired upon Israel only 10 percent partially struck buildings while two percent slammed directly into buildings.
Obvious any loss of life is a terrible thing and we do not want to minimize their loss and their contribution to society, yet we realize that without HaShem’s intervention there would have been many more lives lost. There have been numerous eyewitness accounts of rockets landing several feet from where the people were standing or from where they had been several minutes before the time of impact.
The missile attacks of Hamas have not been discriminately directed towards military targets. Instead the Katyusha missiles hit an empty kindergarten in Ashdod where thirty children usually fill the room. Fortunately it was the building which sustained heavy damage in the attack. The week before, a rocket in Be'er Sheva slammed into a high school, where hundreds of students normally attend. Fortunately, the students were not in the building otherwise the disaster would have been horrific because the students could not have reached a fortified shelter within the 60 seconds between the activation of rocket warning sirens and the strike.
It is important that we continue to stand for Israel and show her our support. Prayer is a wonderful thing and I am not trying to negate it however, those who can do more need to do so. Christians worldwide needs to show Israel in tangible terms of its support. Foreign Minister Tzipi Livni articulated it very well when she made the comment "The world has to understand that it must choose a camp – Israel or the terrorists,"
How can you help? There are many ways that we can show our support here are just a few. Those who have email can send their comments to some of the members of the Knesset. Here you can voice your feelings to those who are in office in Israel.
Tzipi Livni’s email is
Email:
zlivni@knesset.gov.il
Benjamin Netanyahu can be reached at
Email:
bnetanyahu@knesset.gov.il
Another way that we can help is to donate to:
American Friends of Magen David Adom-ARMDI888 Seventh Avenue, Suite 403New York, NY 10106
Toll-Free : (866) 632-2763Tel : (212) 757-1627Fax: (212) 757-4662 E-mail : info@afmda.org