The business world has been through big changes in the past several years. Our uncertain economy has crushed us with tighter lending and lower consumer demand. Technology has brought more of our customers into contact with each other than any time in the past. Society has made a shift towards supporting small and local businesses.
These changes feel a lot like a small town. Small town businesses have long dealt tight local lending and low consumer demand. Our customers can all talk to each other down at the coffee shop, and our communities promoted shop local campaigns, long before they came to national attention.
So if the business world is more like a small town, can we learn anything from small town businesses that would be useful? Yes! Here are seven specific principles that work for all small business today.
1. Plan for zero.
There will be tough years ahead. There will be months with no money coming in. There will be periods with no growth. The small town businesses that survive, are built with a plan to survive those lean times. It comes from our farming heritage, knowing a crop can be lost or destroyed, taking the year's income along with it.
This is true now for all businesses. Jim Collins, author of Good to Great, said in an interview, “As soon as you can, I mean before you grow really big, your first priority should be to reach a point where you have enough cash that you could go a whole year without revenues if you had to because someday, you might have to.”
RELATED: Cash flow tips
2. Spend creative brainpower before spending dollars.
Being creatively frugal is second nature to small town businesses. We'll find ways to re-use almost anything. We'll make a window display with used tires, and borrowed ones at that. We also get creative about financing, using cooperatives, community ownership, and even fund raisers to keep our businesses going. Minneola, Kansas, just reopened their grocery store by using community ownership. Businesses in urban areas can adapt this creativity, too.
3. Multiply lines of income to diversify your risk.
This definitely comes from our farming heritage. Farmers use multiple crops to spread out their risk. If the wheat crop is a bust, maybe cattle will do well that year.
Any urban business can use the same techniques, and add lines of income within their area of expertise. Besides consulting, you might offer group training, printed workbooks, online courses, or sell associated products from others. That's multiplying your lines of income.
4. Work anywhere, anywhen through technology.
Being located in a small town doesn't limit a business to a tiny geography. Look at L.L. Bean, based in Freeport, Maine, or Hopunion, based in Washington State. Both are doing business all over. The revolution in shipping and commerce has meant the loss of geographic advantage and disadvantage. Small town businesses have been poking holes in limitations ever since.
Microsoft's Work Without Walls survey showed that remote working technology is fast becoming, not a benefit, but an imperative. Every business needs to adapt the "anywhere, anywhen" technologies that let them change their game.
5. Treat customers like community.
In a small town, word spreads quickly among customers. One bad experience with a merchant can be told and retold all over town in no time. The best small town businesses have learned to thrive in this environment by treating all customers well, respecting them as individuals, and by being part of the community.
Every small business now faces the same type of intensive communication between and from customers. The answers are the same, too: treat all customers well, respect them as individuals, and be part of your community, however that is defined.
6. Be proud of being small.
There has never been a better time to be a small business. A survey by American Express showed that 4 out of 5 Americans think small businesses give better service than big business. Although small businesses are routinely advised to try to appear bigger than they are, now customers are ready to trust you more than big businesses.
7. Build your local connections.
As the Shop Local movement shows, American consumers are ready to support local businesses, especially in ways that are easy for them. That makes this a great time to flaunt a local accent, to tell the story of how you are connected to the local community, and to share what makes your business something special. These are all small town business characteristics that apply to small business everywhere now.
READ NEXT: NFIB's interview with Becky on How to Build Advertising Budgets in Rural Communities