NFIB

Five Ways to Take Advantage of an Economic Downturn
04/ 15/ 2002

Savvy small business owners can find opportunities in the economic slowdown predicted for the summer and early fall of 2001. In today's Workshop, Jeffrey Moses discusses five ways to take advantage of an economic slump.

1. Finding lower advertising rates. During any economic downturn, some businesses will decide to (or be forced to) cut back on their marketing budgets. If you have the resources to maintain or even increase your own marketing budget, you may be able to use the economy's overall decline to negotiate significantly lower advertising rates. Newspapers, magazines, radio and TV organizations may all experience a decline in the number of businesses advertising. Take advantage of this by negotiating the best possible rates, and consider establishing long-term contracts during this time to take maximum advantage of the bargain.

2. Securing lower-cost leases. Many companies will forgo expansion (and there may not be as many start-ups), so take advantage of this by negotiating reduced rates for leases.

3. Softening prices on equipment, furniture, and supplies. Many computer companies are cutting prices drastically to remain competitive. The same is true of some office furniture and office supply companies. If you need to upgrade computer systems or purchase furniture/supplies, the next few months could offer some excellent opportunities to cut costs. Always remember that you won't get the lowest price unless you ask for it. And never make major purchases without getting prices from at least three vendors. For complete information about getting competing bids for your purchases, see the former Workshop: Accounting Methods 101.

4. Reduced costs of service providers. If your offices need refurbishing, or if you've been thinking of expanding, this could be the perfect time to secure economical services such as plumbing, electrical work, carpentry or landscaping. This will, of course, depend on the demand in your geographic area.

5. Payment terms on bills and invoices. If you've been paying your bills when received, or during the first 30 days after receipt, you might want to consider pushing your payment schedule back to 60 days or even 90. Notify your suppliers about your change in payment schedule -- you'll probably find that they aren't surprised. A cautionary note: don't jeopardize your relations with suppliers. For complete information about extending your payments, see the former Workshop, "The Check's in the Mail: The Money Tug-of-War."

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