According to the news and various experts, a global trade war would be bad. Very bad. And while it’s unlikely the trade war would directly impact most small businesses, it’s safe to say … INDIRECT IMPACT is assured.
A trade war can affect sales, reduce revenues and ultimately push many small businesses under unless they take special measures to mitigate the impact.
The following 16 recommendations will help navigate the turbulence of a trade war and help your small business survive … and hopefully thrive!
Remember, you need to do business to stay in business.
- Don’t panic, avoid rash decisions. This too shall pass – honest.
- Be brave, hold the line. Winning sometimes means being the last man standing.
- Don’t cut prices. Focus on value. A reduction in price seldom increases business enough to cover the price cut.
- Build a cash reserve. Manage your inventory more effectively. If you can, have your suppliers carry inventory for you.
- Remember businesses only fail for one reason: they run out of cash.
- Renegotiate your leases, your credit terms, and other debts. Credit is capital – never forget that!
- If cash is tight, pay your payables at the maximum time your terms will allow. – not in the order received.
- Conversely stay on top of your receivables. Encourage prompt payment with incentive discounts. Pickup cheques and payments whenever possible with delivery.
- Contact all your clients – work on reestablishing connections. Focus on your current clients, mine that gold!
- Lock clients into longer contracts. Use concessions to encourage them. Reward (renewed) customer loyalty.
- Review the books, remove bloat and unnecessary expenses or ‘perks.’
- Review your human resources, if you have staff that are not adding to the bottom line consider outplacement.
- Can you get overseas income? If you can go international, try it. The trade war is unlikely to have hit everywhere.
- Keep marketing and advertising. If you must cut costs in advertising then advertise smart: reallocate your budget to measurable mediums like the Internet.
- Pride has no place when survival is at stake.
- Write a blog post about how to survive a trade war. That way when people go looking online for advice they’ll find your post and your increased traffic will potentially make you some advertising money or at the very least some new friends who valued your advice. *smile*