GoFaxer Blog

With a recession or economic slowdown here, it may be time to invest in new systems like email fax that will increase your profitability. It may even be necessary to invest seriously in major and expensive innovations to your infrastructure.

What? Did I read that right? Is he really suggesting that I spend a lot more money during a recession? I am. I’m not saying that you should spend more money on executive perks. I’m saying, it’s time to innovate. It’s time to spend money on big things that will improve your companies success and profitability dramatically.

The reason it’s a time to invest is it’s a perfect time to borrow. During recessions interest rates go down. The bank lender’s criteria may be stricter, but that isn’t necessarily a bad thing. If the investment is solid, if your business’s basic health is good, you’ll be able to land some amazing financing during this period.

John Tozzi at BusinessWeek.com says:

“Banks are still looking to lend to companies that have the ability to repay, according to Rebecca Macieira-Kaufmann, executive vice-president and head of Wells Fargo’s (WFC) small business segment. ‘In any economic environment, we’re going to want to look at a profitable business, an established business that has a history,’ she says.”

There is certainly a risk, trying to grow during a slowdown, but be smart about it and be bold. You could make it through with a smart return on your investment.

Now is the time to spend money on your business in ways that will either increase your sales or decrease your over-all expenses. Unfortunately too many businesses stop spending money during a slowdown. For example, if switching to email fax saves you money and makes you more efficient, it doesn’t matter whether we’re in an economic boom or a recession, you’re going to make more profit from the practice.

One area that you cannot slack on spending is marketing. This might go counterintuitive to your instincts. But you may have to spend more money if you want to make more money. I’m sounding like a traditional marketing manager who wants to spend indiscriminately to increase the size and scope of their programs. But I’m not advocating spending willy-nilly. I’m suggesting better, smarter marketing programs, and more of them. Because a good marketing strategy will make you more money. So why not do more of it?

Let’s say that your business puts 4% to the bottom line. If you spend that 4% on new marketing strategies, where much of the expenses are already fixed elements of being open for business, most of the increase in sales will go directly to your bottom line increasing it to 10%. You may be spending more than you were before, but you’ll be making more profit.

So start spending darn-it!

It’s time to cut unnecessary expenses. It’s easy to get sloppy about this when your small business is growing dramatically, you’re making a profit, and the future seems brighter than summer. But with an economic slowdown eminent, it’s time to get Edward Scissorhands on those expenses. An article at BusinessWeek.com by Jeremy Quittner outlines one business’s cost cutting:

“In 2007, Polla Tray sent $30 bottles of champagne to customers as holiday gifts, rather than the $45 box of chocolates she gave the year before. She asked her sales staff to stay with friends and relatives when they traveled and to book flights during off-peak times. Those changes helped Alchimie slash its $20,000 annual travel budget by 15%.”

The key is to cut costs for things that aren’t vital to increasing your sales. You may need to have less company lunches. Maybe hold off on that conference room renovation. Do spend money on email fax, new marketing campaigns, and better systems that benefit your customers.

I like the example of Polla Tray choosing a different customer gift. Maybe the $30 bottle of champagne will actually have a greater perceived value than the $45 dollar box of chocolates. By getting serious about cutting costs, you may actually find better ways to do business.

So feel free to get out the scissors. And make this a strong time for your business.

Believe it or not, there are going to be some new small businesses starting during this year, a time of economic slowdown, that are going to do very well.

An article at BusinessWeek.com by Jeremy Quittner says:

“An economic downturn can be a great time to start a company. Competitors may go out of business, and the cost of labor may fall as more people are laid off and look for work. Commercial rents may decline, allowing you to score office space at a discount, and marketing and advertising expenses also tend to slide.”

Quite simply, during recessions, it becomes a buyers market. For new small businesses with a lot of new purchases, a bad economy can be a perfect house warming gift.

Businesses that survive their upstart during a slow economic time create a solid foundation to build their business on, a foundation which will be enormously profitable as the economy rebounds in their second and third year of doing business.

These companies aren’t going to waste their money on old technologies. They’ll be able to start clean with new and efficient technologies like email fax, better software, and other state of the art systems that many of their competitors haven’t gotten around to implementing.

At the end of the day, if your business idea is solid, if you’ve got great go-getters working for you, if you’ve got a good new business concept, you’ll be able to survive in good and bad times.

Everyone’s heard the bad news. We are either in a recession, or at least an economic slowdown. Investors are crying. Companies are tightening their belts.

But I think all of the boo-hoo-ing is perhaps a little overwrought? I mean, we’ve been through slowdowns before. And this happens to be a time with great opportunity for the smart small business leaders.

You’ve heard the adage that whatever doesn’t kill you makes you stronger. It may be trite but it’s true. This week I’ll be focusing on the advantages for small businesses going through an economic slowdown.

The fact of the matter is that you have an opportunity to really strengthen your business during this time. This is the year to really get serious about improving efficiency, eliminating waste, and getting more aggressive about attracting new customers. Now is the time to turn your small business into a really amazing business.

When times are easy, it’s easy to not be as tough on ourselves. We take credit for success that may or may not be earned. But now, where every dollar of revenue has to be fought for, you can improve your company. All of those technological advances like email fax that you’ve been putting off implementing are now necessary. And your business will profit greatly from the new standards that you’re going to be put in place. So put a smile on your face, and get to work. Recession can be a blessing in disguise.