NFIB

Getting Past Setbacks
07/ 11/ 2003

by Jeffrey Moses

Unfortunately, most small businesses encounter some sort of obstacle in their lifetime. That is why knowing how to remain steadfast during difficult times and recover from adversity is vital for your success as a small business owner. Keep in mind the following to help your business make it through tough times:

Accurately and objectively evaluate the situation.

Determine how much you're spending relative to your cash flow. Then make a realistic projection of what you expect your cash flow to be over the next three months, six months and year. You may need to consult your accountant or business adviser to ensure accuracy. Comparing cash flow and projected cash flow can help you determine exactly where you need to reduce expenses, and by how much.

Be ruthless in your cost reductions.

It is often surprising how much a business can cut back on expenses and continue to function with little or no reduction in efficiency. Many small business owners can reduce their overall costs by cutting back on personal expenses as well. These include personal items such as food and beverages, vacations and entertainment, to name a few.

Analyze cash flow.

What changes or additions can you make to improve cash flow? While it may not seem like it, perhaps now would be a good time to add new products or services to your line. If that does not seem feasible, it might be helpful to put emphasis on products and services that are your biggest sellers.

Examine all business and personal loans you have and see if you can refinance or adjust payments to ease your cash expenses. Also, meet with lenders to see if your business could benefit from another loan. An infusion of cash may be the way to jumpstart your sales. But be careful -- taking on new debt must be considered carefully.

Maintain a winning attitude.

No matter what happens, it is very important to remain confident in your own abilities and in the goals you have set. It is easy to become depressed when thinking about missed opportunities and about how great things could have been. Instead, keep yourself focused on each day as it comes.

Also, avoid using negative terms when describing your situation. You can easily reinforce a mental state of nonconfidence by calling yourself a failure or by associating with people who continually talk about how hard it is to run a business or how bad the economy is. No matter how bad things are, some people find a way to be successful. You want to be among that group, so don't let others talk you out of it.

Seek assistance and advice.

Perhaps the biggest mistake during financial or business setbacks is to tough it out alone. Consult associates, friends, family members, professional advisers and industry experts to find out how you can make the most of your immediate resources to turn things around.

Also, read about the success of others. Many experienced and inspiring businesspeople have written books to share their stories of adversity and triumph. Their success can serve as your foundation for turning things around.

Improve your skills.

Remaining confident in your abilities doesn't mean that you should neglect opportunities to improve your skills through seminars, classes and advanced training. The more proficient you are in your area of expertise, the better your chances of rebuilding your business. In fact, many large corporations employ this tip with their employees who are between projects. Instead of waiting for the next project to come along, employees use that downtime to learn new skills.

Maintain good health.

Don't let stress get to you. When you are stressed, it is easy to stop the very things that give you the most strength - exercise and hobbies. Maintain your exercise schedule or begin a new exercise program. Don't start binging on snacks and make sure you get enough rest by going to bed early.

Along the same line, search for ways to laugh and maintain your sense of humor. Watch funny movies and laugh at the comics in the newspapers. When going through trying times, many people can become downright somber, which gives off an air of worry and failure to others, making it difficult to attract success.

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