Negative Times for Small Businesses Call for Positive Thinking

Suzanna De Baca -- Expert Business Source, 7/11/2008 7:11:00 AM

As the weak economy limps on month after month, many small business owners are feeling pessimistic.  Rising costs and decreasing revenues can challenge even the healthiest business, but when the going gets tough, it is more critical than ever for small businesses to remain positive about the future.  

Maintaining a positive attitude can be difficult when you’re feeling squeezed, but if you don’t feel optimistic – or at least confident – about your business, who will?  If you are an owner or manager of a small business, you set the tone for customers, employees and even investors.  Staying positive can be one of the most important characteristics to maintain as you weather the uncertain economy.

Stop comparing yourself to others.

 By many accounts, confidence seems to be at a record low.  A June 9, 2008, AP article entitled “Small Businesses Fighting to Survive,” which appeared on MSNBC cited a February National Small Business Association survey of 500 small business which “found that 71 percent of business owners have a ‘negative outlook’ on the economy compared to 43 percent a year ago and reported that owners’ confidence in their business’ success dropped from a high of 81 percent a year ago to 70 percent now.”

Steve Strauss, a consultant and author of The Small Business Bible, also cites several reports on slumping small business owner confidence in a July 7, 2008, column in USA Today entitled “Ask an Expert: Tough times mean you'll face hard choices.” 

Strauss references a NFIB May 2008 Small Business Economic Trends Report which showed that small business optimism is at its lowest level since the 1979 oil embargo and points to a study by Warrilow and Co., which indicated only about 40% of small business owners were optimistic about their own sales and far fewer were optimistic about the economy in general (27.5%).

With studies like this, how can you maintain a positive attitude?  While it is important to be aware of the reality of the economy, it’s easy to slip into negative thinking when it seems like everyone around you is also feeling negative – but your business is not their business. Remind yourself that it doesn’t matter if other businesses are not feeling optimistic.  Does their attitude drive your business?  If you concentrate on everyone else, you take the focus off of the constructive things you can be doing in your own company.

Think outside the box – because you can.

“The problem small businesses have is that, very often, we are at the mercy of much larger business and grander economic forces,” writes Strauss in the USA Today article. 

While this may be true, Strauss’ article goes on to say that because small businesses have less breathing room in a bad economy, owners and managers must get creative in order to survive.  The good news is that as a small business you can get creative.

Fortunately, small businesses are more nimble than their larger counterparts and are therefore able to initiate innovative solutions quickly without having to cut through layers of bureaucratic tape.  The owner or manager of a small business can rapidly adapt to changes in the economy by adjusting budgets on both the expense and income side.  While a huge corporation may respond to an economic downturn by initiating massive layoffs, a smaller company can quickly tap into new markets, look for different sources of revenue, put non-critical projects on hold, or cut costs in resourceful ways. 

If you’re feeling discouraged, remind yourself that your independence and your ability to think and act outside the box are two of the most valuable tools you possess as a small business owner. 

Review your value proposition.

Similarly, if the economy is getting you down, some reflection can give you a boost.  You’ve run a successful business so far.  People have trusted you.  Reviewing the reasons for your success can remind you that you have a great product or service to offer and can reignite your belief in your business model.

It can be a valuable exercise to take a critical look at why customers do – or should do—business with you.  Ask yourself what your true value proposition is.  Is it your customer service?  An innovative product?  Consistent quality?  Now is the time to understand your brand, hone your unique value proposition and remind your customers what it is that you do best.  Promoting yourself can be the best investment you can make in difficult times, and reminding yourself and your customers of the true value of your products and services can boost your confidence and your sales.

Be realistic, but optimistic.

While savvy business owners must be realistic about the economy, maintaining a positive attitude is critical.   Try not to be influenced by others’ negativity, embrace your ability to be creative, and remind yourself of the true value your business adds.

Suzanna de Baca is president of Private Capital Solutions Group. Securities offered through Broker Dealer Financial Services Corp. Member FINRA & SIPC. Investment Advisor Representative of Investment Advisors Corp., A Registered Investment Advisor. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice.