6 Recession Strategies for Small Businesses

Running a company during a recession can pose major challenges to their owners. But it also offers them an opportunity to revamp their businesses and find new avenues for success.

Here are six strategies for small-business owners who are struggling to survive in a weak economy:

Exercise your bargaining power: Recessions can take a toll on a company's cash flow. If you're having difficulty paying your suppliers, work with your vendors to create a payment plan that's more manageable. You might be able to use the economic crisis as a bargaining chip to renegotiate your contracts and get better terms.

You should also look for ways to reduce inventory to keep overhead costs down. And be sure to bill customers right away, which can help speed payments and keep cash flowing.

Focus on the profit-makers: When the economy is flying, it's easy to get sidetracked by adding ancillary products or services that might broaden your company's appeal but water down profits. Take a critical look at everything your business offers and concentrate on the efforts that will bring in the most cash. Weed out time- and labor-intensive services that are less profitable.

Explore the art of the deal: Customers still spend during recessions, but they're more cautious and sensitive to bargains. If you provide services, consider bundling some together under a lower price. Try offering reduced prices for groups. Look for underserved customers and lure them with discounts. Special prices might hurt in the short term, but attracting new clients will help you generate revenue after the economy rebounds.

If you liked this article you might like

5 Steps to Maximize Retirement Savings

Cheap Vacations That Go Off The Grid

Cheap Vacations That Go Off The Grid

Five Steps to Maximize Retirement Savings

Five Steps to Maximize Retirement Savings

Five Cheap Vacations That Go Off The Grid