The financial crisis is hitting just about everyone at this point from all walks of life. Prices are rising and people are NOT spending. This is obviously not a good combination and if you are a business owner, you know all too well how hard the crunch is getting.

Owning a business during a financial crisis such as this is not only challenging, it can be downright impossible. If huge companies like General Growth Properties (the LARGEST manager of shopping malls in the country, more than a 30 billion dollar company) have to file for bankruptcy, what hope is there for small companies like yours?

Well, the good news is the giant megaliths have HUGE overhead and they need massive amounts of cashflow to continue operating. Companies that do not have such a burden are much more able to move and make changes during this hard economic climate.

Below are a few suggestions that can help you better survive the current financial crisis:

Employees

Employees are your lifeblood, but they can also suck the blood OUT of your company as well. Times are tough and there is no question that you want to take care of the folks that help run your day to day operations, but in this environment, dead weight needs to be shown the door.

You must make sure that each employee is not only pulling their weight, but is adding to your bottom line. Decisions to fire employees can be tough, and no one wants to be the bad guy, so offer incentives on production and provide support. If they can’t do the job though, you have to let them go. Your business may depend on it…

Purchasing

Your bottom line can be affected by any purchases you make for your business down to the cost of rolls of toilet paper. Reevaluate your budget and make sure that every penny spent is well spent.

Look for discounts and definitely cut out non essentials. Now is not the time to splurge so keep spending to a minimum based on what you need to keep your daily operations running smoothly. Remember all those lunches you used to take your clients to? Bring to your office for coffee instead. They will appreciate the time you spend with them as well.

Marketing

One of the first things that many business owners do during a recession is to dramatically cut their marketing budgets. Wrong! This is often a mistake, as once you cut your connection to new customers, the downward spiral can be devastating.

Instead, it may be time to simply revisit your current marketing plan and make some changes. Redo your marketing message to be more effective to speak to your customers during this financial crisis. Offer incentives and discounts to customers and definitely put a referral program into place.

If you can spend $10 to acquire new customers, offer your existing ones $10 gas cards for any referrals they bring to you. The bottom line is, don’t cut your budget, make your marketing more effective.

The suggestions above represent some of the time tested methods that business owners have been using for years to cut their expenses and improve their bottom line. If you have a clear understanding of exactly where your money is going, and everything that you are spending money on is producing, you can not only survive this financial crisis, you can thrive in it.

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