How many times have I read about the stuff people wished they’d been taught at business school? Why do entrepreneurs have to go through the tough lessons themselves? I mean, sure, making mistakes and learning from them is all a rite of passage for business owners, but you get the hunch that someone at business school could have saved you just some of the bother.Here’s a few of my tips. I’m sure others have their own to add.Always know your cash position. Cash really, really is king.Automate where possible.Shit happens. But it’s never as bad as it first seems.Slow days are good. Use ‘em for thinking and brainstorming.When it comes to marketing: test, record, test, record. Rinse and repeat.Tough times won’t last, but tough guys and gals do.Never try to sell a business in a recession or when your business isn’t doing as well as it has in the past.
Entrepreneaurs are the life-blood of the economy. In these tough and turbulent times, the risk isn’t the reward. Those that give it a go and make it through the recession will thrive and so will their communities. Seize the opportunity. Watch this great video from grasshopper.com.
Yesterday, President Obama announced a major boost for small businesses across the United States. The US Treasury is going to buy up to $15bn of Small Business Administration (SBA) loans in a bid to increase liquidity in the business loans market and provide a massive stimulus to small enterprises. President Obama said: “Small businesses are not only job generators, but the heart of the American dream. Too many entrepreneurs can’t access the business capital they need to start or grow their businesses.” Clearly, the objective of this new policy is to change this situation immediately. The point is that in this period of financial illiquidity, many firms are at risk of going under not because their businesses are inherently unprofitable, or even that they are experiencing a major downturn in sales. It is because they naturally experience sales cycles and that the usual access to bank funds to shore them up during the low points has been denied to them over the past 18 months. Let’s hope that the top-down directives of this new policy are implemented in a fair, proper and intelligent manner.
According to several business brokers I have spoken to over the past few weeks, the number of small businesses for sale has dropped significantly. Everyone said that they had fewer businesses on the books and had not closed many deals.
The drop in sign-ups is partly due to prospective sellers concerns about the lack of buyers with access to funds. And fewer buyers means lower transaction values.
Carl Cusano of the New York Business Brokers Association offers the following advice to sellers: “If you’re serious about selling, you have to consider seller financing because the banks aren’t handing money out as they were in years past.”
Cusano added that business brokers were feeling the pinch across the US and he knew several that were about to go to the wall.
Businesses for sale website bizbuysell.com have reported a 20% reduction in the number of completed transactions in the last quarter of 2008.
Across the pond in the United Kingdom, Business-sale.com, the leading provider of information on medium to large businesses for sale, also reports a downturn in transactions as reported by buyers.
Information director, Robert Moore, said that it is hard to get a real fix on the industry figures because so many deals are private and there is a reticence to divulging transaction details in the UK.
But Moore said, “this is a remarkable period of opportunity for many entrepreneurs. There are low interest rates and low inflation forecasts. Hundreds of businesses are going under because they simply cannot service their debt commitments, even though their underlying fundamental business is sound. Smart operators with cash are mopping up, buying these distressed business and either paying off the debtors or using a pre-pack administration order to create a clean company.
“They are left with some great businesses producing returns far in excess of what is achievable on the stock market or in bonds or other savings accounts.
Every business person and entrepreneur is facing a changed environment in 2009. For some, the landscape is very barren indeed. How is your business outlook changing and what do you plan to do about it?
Here are my resolutions:
Update the business plan and forecasts
Transfer the plan from Excel to one of the cool new web-based, multi-user business plan wikis like planhq.com
Re-evalulate short, medium and long term personal and business objectives. Make sure they synchronise!
Trim unnecessary expenses
Really focus on our competitive advantage Buy a business – there are are some real opportunities in distressed business sales right now
