Here's some advice from small business experts:
Protect your credit. Maintain the best credit possible to ensure you can get a loan, if needed. Pay bills on time. If you're having trouble making a payment, let the company or bank know why. If there's a payment dispute, get something in writing that says you aren't to blame. Being turned over to a collection agency will tank your credit score, something you can't risk.
Show 'em the love. Great employees are often the best defense in tough times. If you can't give raises or bonuses, show your appreciation, even a handwritten note. Bring in lunch once a month or doughnuts and coffee. Showing thanks makes it more likely employees will stick with you.
Cut the fat. Some cuts may be obvious, like cable TV in the office. Ask employees, who may be aware of less-obvious savings. If your lease is up, consider moving to cheaper space. Or ask your landlord about a temporary renegotiation. Do more yourself to control labor costs, whether it's washing windows, stocking shelves or cleaning bathrooms.
Stay tuned-in. Keep abreast of industry news, so you know where to point your business. But don't get so bogged down in bad news you get distracted from running your business.
Don't let bad debts pile up. Remember you're running a business, not a charity. If a payment is overdue, notify the customer immediately. Customers who don't pay aren't good customers. Set up a payment plan they can live with.
Manage your inventory. Don't purchase more than you can sell. Reduce prices, even if you don't make back every penny you paid. The product will be worth more in your bank account than sitting on a shelf. Unlike wine, inventory does not improve with age.
Hang onto customers. Get feedback through surveys, comment cards and conversations. Show immediate action in areas they complain about. Consumers will accept some cutbacks, but still expect good service. If you're in a restaurant or retail business, greet customers; make it feel personal. In other businesses, call longtime customers to be sure they're satisfied. Don't try to sell them anything; simply thank them for their patronage.
Proceed with caution. If you've got plans for expansion, consider delaying.
A final note: "The economy is getting a lot of blame these days for sinking businesses," says Ed Hess, a University of Virginia business professor. "(But) sometimes it's just a convenient scapegoat. When you have a business with a good foundation and you take the necessary steps to protect your company, a small business can survive tough times."
Sources: Dennis Tootelian, business professor and director of the Center for Small Business at California State University, Sacramento, and Ed Hess, co-author of "So, You Want to Start a Business? 8 Steps to Take Before Making the Leap."
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