SBDC Director Corner - February 2009

Economic distress is definitely affecting not only our Country but also our local community. I guess that is the true advantage of getting older, this recession/depression is not exactly a new occurrence.

When I started my college career many years ago there were foreclosures and many friends with parents who were laid off from their jobs. People were taking any job available for whatever duration just to keep out of debt. It was a good time to be in College because many of my classmates had actual work experience and were able to bring real life to all the theory. It was also the time I started my own business.

There are differences between all the other recessions and the current economic challenges of course. In those days of long ago many people started their own businesses because it was the only employment they could find. There were a few large organizations that were closing but we were also changing from a manufacturing base to the information age. People in those days expected to have the same job until retirement with healthcare and pension plans. Today it is very common for people to have new employers every 2 or 3 years, self retirement plans, and a more preventative approach to longevity.

What is important today is just surviving in your business until the economic conditions change and jobs become plentiful, or changing the conditions now to become more competitive in the current conditions. How can you change your business today to prosper and not compete against all of your starving competitors? Another question is when was your business plan created or updated? Like I frequently discuss with clients in marketing their business is that if isn’t working why keep doing what you are doing, think of new things to do that are different.
If every one of your primary competitors is cutting prices making the business you are in unprofitable, it is time to start looking at different things to do. Some things we are doing are looking at National trends to “go green”, and infrastructure opportunities.

Who will be the first hotel, restaurant, cleaning service to actively promote zero chemical usage? What builder will sell solar packages or use recycled products in their construction? And will consumers pay a premium for this green philosophy? My thoughts are that it is recognized as the way of the future and there are few if any competitors currently chasing these opportunities.

The strategy I believe is important is to continue to operate the current business the best you can but to be sure and reposition your business to take advantage of what will be the future. Gaining a competitive advantage will mean not continually trying to do more for less, but to innovate in areas of need. This is why everyone is looking at small businesses to revive the economic superiority of the Country; historically small businesses are the innovators in the Country.

To write a new business plan, or revise your existing plan let us assist with the process. Every day we continue to see new tools and developments that are going to help you prepare better tools for your business. We won’t offer you a bailout but will hopefully stimulate your entrepreneurial situation.

Randy Nelson, SBDC Director
Arizona Western College