Small business - How to survive in tough times

Small businesses very often have it tough. In fact a majority of small businesses fold up within the first few years of operations itself. Of even those that do survive the initial stages, only a few of them thrive, sustain for long or develop into large, robust businesses. A vast majority of small businesses that continue, carry on for ages on a hand to mouth existence, barely surviving. Here are a few tips to consider at all times, particularly during tough times:



1. Focus on cash flows: Many small businesses have perennial cash flow problems. This can be stressful, destructive to the business and can be a vicious cycle stunting growth and development. Hence it is important for a small business owner to keep good control over cash flow and focus heavily on a good cash flow.



2. Stick to the knitting: Focussing on ones core competence and getting expertise and acknowledged reputation in ones core competence will stand by one during tough times.

Avoid these common small business mistakes

Small Business - Hiring employees

Hiring an employee is possibly one of the most important decisions any business would take. This is particularly true for a small business. While getting a very suitable candidate can make a huge difference to business success, the cost of hiring a wrong or unsuitable candidate can be very high. Since a small business would have only a few employees, it is all the more important that each of them meet the expectations of the business.

Hence it is essential for a small business to evaluate and recruit candidates very carefully. However small businesses often do not place much importance to this function. Hiring is often done in an ad-hoc manner without much planning. Here are a few tips that might be useful in this regard.

What to do before hiring?

- Prepare a detailed job description for the job you are hiring. This will help you select a better suited candidate. It will also help a prospective candidate decide whether or not he will find the job appropriate.

- Think of the educational background, quantum of experience, and type of experience you are looking for in the candidate.

- Sometimes you can get good candidates by word of mouth advertising. Existing employees are often a good source to refer new candidates. If this is feasible for you try and get candidates this way. If not you have to take up the other options of either advertising in media, or searching through job sites databases or going to a recruitment agency.

What to do during the hiring process

- Ensure that the candidates coming for recruitment are attended to promptly and professionally. This is most likely their first impression of your organisation, and it should be a good one.

- Spend time studying the resume of each candidate before interviews/discussions.

- Do verify any references given.

- It often helps to have an interview panel of more than just one. Different people bring different prespectives to the process.

- Keep the entire process professional and courteous. The objective should be that even candidates not selected should go away with a positive opinion of your organisation.

What to do after the hiring process

- The first few days/weeks of a new recruit are most important. This is when he/she makes up their minds to a large extent about the organisation.

-Make sure that the process of joining and starting is as easy and comfortable as possible.

- Ensure that the job role, reporting requirements etc are well understood.

- If it is a trainee position, have a well-structured training program/plan well in place. If it is a more experienced position ensure that the actual project/job is commenced early on.

Is a Small Business right for you?

Starting a small bsuiness is often easy. The idea of being one's own boss, working the hours one wishes (and hopefully making lots of money) is tempting; more so in these tough economic times. However starting a small business may not be right for all. Remember, a large proportion of start-ups fail within a relatively short time.

So, is a small bsuiness right for you? While the risks are many, it can also be an incredibly rewarding experience.

Customer delight in small business

It is usually more cost-effective to retain an existing customer than to acquire a new one. This is true for all businesses and more particularly for a small business. A small business should try to not just meet, but exceed a customer's expectations from it. When we do something even a little more than what is expected it often delights the customer. When I buy guavas from my fruit vendor, he often quotes a price of 4 for Rs. 10. When I do make the purchase he sometimes throws in a 5th one free. This unexpected extra delights me. Delighting a customer need not even always involve giving more of the product - it could be in faster delivery, customisation, extra service, or even a pleasant word - anything which goes a little (even very little) beyond what the customer expects.

Very often a small business may not be able to compete with its larger competitors in many fronts such as price, brand, reach etc. In such cases the 'little extra' may be its only competitive advantage that can enable it to stand up to its bigger, more resourceful competitors. A 'delighted' customer is very valuable - he keeps coming back .. and spreading the word about his delight.