The Meltdown and Small Business: Build Your Own Economy

I’m a big believer in working through problems, identifying solutions, setting goals, and hitting them. I expect you know by now that the country is in the midst of a crisis caused by deregulation and its aftereffects. I won’t go into who’s really responsible, aside from noting that the fix to the Great Depression included regulating the financial industry through the New Deal legislation, and that most of the regulations were dismantled or watered down in the 1999 Gramm-Bliley-Leach Act.

So, credit is tight, capital is tight, and we’re not sure what’s next. The bailout is huge; $700 billion of a revolving fund to buy back bad debt. Now, wouldn’t it be nice if there were something in that bailout package that helped small businesses? Like affordable healthcare, for instance? Or a nice line of credit? One can dream.

The economy’s not great in general. But yours doesn’t have to be. Build your own economy! That’s right–you can ignore the bad news and create your own good news. Here are a few ideas.

• Measure everything: how much you spend on each marketing tactic, the revenue that comes in per tactic, then refine your marketing and invest in what works. Stop the scattershot approach. 80% of your business will come from 20% of your customers, so that’s where you should start.
• Call your top customers and ask them how they are. Listen. Don’t sell
• Send them a letter thanking them for their business. Include any new product or service brochure or product sheet.
• Identify customers that haven’t bought from you in the past year or two. Send them a targeted promotion. Include the line “we’d love to have you as a customer again!”, because you would, of course.
• If you don’t have a monthly or quarterly newsletter, start one! It doesn’t have to be fancy, and it doesn’t have to have a lot of features. But it should include something new and interesting about your part of the world, and should NOT be a marketing or sales piece. Ask yourself this: what would be useful information for my customers?
• Look for sources of new leads. If you don’t have a website, start one (easy to create and set up at Homestead.com, Godaddy.com, and a long list of others). If you have a website, improve your searchability with Search Engine Optimization (SEO). If you are already optimizing your site for search, try Google Adwords. Even with a small budget, you can drive relevant traffic to your site.
• Reach out to a complementary business and create a bundle offer and split the marketing costs. You might be able to create new value for your customers and make friends along the way.
• Ask your friends and family for leads. Don’t ever feel bad about asking for help–it’s human nature to want to help, and people appreciate it when you ask for it.
• Watch your own spending. Cut down on things that don’t work. Invest in what works.
• Don’t cut your healthcare coverage. Maybe increase the deductible, definitely start an HSA, but don’t give up your coverage. That’s a vulnerability you simply cannot afford to take on.

I hope this has been helpful. CircleDog, of course, is great for creating segmented lists of your customers and sending mail to them in a few clicks, so it makes it a LOT easier to do some of the things I’m suggesting.