Three ways to put small business growth back on track
Posted on Mon, Nov 22, 2010
Traditionally the engine that drives job growth, small business has become the caboose.
Beset by red-tape, lacking financing and grappling with fiscal and economic ambiguity, entrepreneurs are starting fewer companies, according to the Wall Street Journal. Those who do start companies cannot, or will not, hire employees.
“Newly opened companies created a seasonally adjusted total of 2.6 million jobs in the three quarters ended in March, 15% less than in the first three quarters of the last recovery, when investors and entrepreneurs were still digging their way out of the Internet bust,” reporters Justin Lahart and Mark Whitehouse wrote.
Yet the big get bigger. According to Gallup’s Job Creation Index, during the week ended Nov. 14, 42% of employees at workplaces with at least 1,000 employees reported that their company was hiring. Only, 9% of workers in businesses with fewer than 10 employees said the same.
As a small business, you can get job growth back on track by managing for recovery.
- Identify your valuable formula by determining why customers buy from you and how you make money. Re-assess the competitive element that generates profit and sustainable success for your business.
- Modify operations by focusing on what you sell, how you provide it and how you sell it, carefully evaluating each department. Review your systems and revise as needed.
- Manage for cash, making it the absolute priority, above profit and investment. The latter will return as operating conditions improve.
These three principal areas of improvement are inter-related. Emphasizing one over another will threaten your company’s long-term survival.
Addressing them collectively will bring long-term success, eventually moving small business back to the front of the train.
Learn more about “Managing for Recovery” by downloading a free white paper from ROCG.
