Today our guest blogger Lindsey Harper Mac writes about the choices small companies may have to make to survive the economic winter. Lindsey is a professional writer living in the Indianapolis area. She specializes in writing guest posts on social media and education. Currently, Lindsey is completing work on her master’s degree.
Entrepreneurs Growing Forward
When a business has been in existence for a few years, has solid cash flow and all is running smoothly, the life of the business owner can look easy to outsiders. But chances are, getting the company to that point required the owner and founder long hours of hard work and great financial and lifestyle sacrifices.
Independent small business owners often start their businesses by investing their life savings, taking out small business loans and even maxing out their credit cards to get the company started until funds from client billings start coming in. Many don’t even give themselves a paycheck for the first year or longer. This is a huge risk and sacrifice they and their families make. Even if the business succeeds, it means that numerous purchases, vacations and any spending that is not absolutely essential must be put on hold until the business gets on solid financial ground.
Likewise, the new business owner must often work long hours to get the business running smoothly and to get enough client billings in the pipeline so there is sufficient cash flow. This can take several months and sometimes years, creating an unbalanced lifestyle that is essentially all work and no play. Not everyone is willing to make these sacrifices. They aren’t willing to work that hard, that long or do without the things they want to make it happen.
But, if they don’t, and the business should fail, all the money they borrowed to invest in it is gone and must still be paid back.
Additionally, even owners of established companies must make hard decisions when the economy takes a downturn, or when a major client decides to cut costs and do in-house what they had been outsourcing to your small company.
One small company, Quality Environmental Professionals, Inc., or QEPI, headquartered in Indianapolis, had tough decisions to make late in 2008 and early 2009 when the economy took a downturn.
QEPI owner, Deb Peters, cut her company’s reliance on color copying, which was costing $9,000 every quarter, and implemented sharing files electronically, and using black and white copies when paper was necessary. Another change she made was in the employee break room, where she stopped buying employees’ coffee in individual packets and began purchasing large cans of coffee from Sam’s Club. By making these and other cuts, Peters was able to keep all of her 34 employees instead of making cuts by layoffs.
Other small businesses cut back on hiring cleaning and lawn care help and asked their employees to help with those tasks to prevent in-house layoffs. A survey of 100 human resource executives conducted by consulting firm Challenger, Gray and Christmas found that more than 66.7 percent of these companies cut travel expenses, and more than 6 percent began letting their employees telecommute to cut office space expenses. Work instead could be done through online conference calls and other technology, such as instant messaging, to communicate with their customers, materials suppliers, vendors and with company employees in satellite offices. In some cases, the satellite offices were dispensed with altogether, resulting in even more savings, and employees in those offices now work from home.
Working together to get through lean times usually strengthens a business overall and positions it for growth during the next economic boom.
About the author: Lindsey Harper Mac is a professional writer living in the Indianapolis area. She specializes in writing guest posts on social media and education. Currently, Lindsey is completing work on her master’s degree.
Also by Lindsey Harper Mac