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6 ways to stay successful as costs soar

Q: Steve - I can't imagine that many small businesses are doing well in a down economy. I just don't see how. What's their secret? -- Richard

A: Yes, some small businesses are indeed still thriving, but no, it sure ain't easy!

I have increasingly been getting questions like this, and so, in an effort to get the pulse of what is going on out there, I have stepped up communications with the many small business people to get their take and share their best ideas.

What I have come away with-from e-mails, conferences, speeches and meetings-is the proverbial good news and bad news.

The bad news we all know-most everyone is hunkered down. Prices, in general, and gas prices specifically, have pinched small businesses especially hard.

But the good news is unexpected: Plenty of folks have figured out ways to not only stay afloat in these turbulent economic times, but get ahead. That's what I want to share.

What I learned is that the trick to staying successful during lean economic times is to do something new and different. Right now, it is unlikely that the same old thing will yield the same old results.

Here are six ways to stay successful, even in tough times:

1. Start new partnerships: There are all sorts of advantages to teaming up with a compatible business in a joint venture:

• Your expenses are cut in half


• New ideas are circulated


• Sharing contacts increases your footprint


• You gain expertise outside of your normal area, and at no extra cost

By finding a joint venture partner and a suitable compatible project, you can expand into new areas while sharing resources and contacts.

2. Fire bad customers and hire better ones: Assuming you have customers who are problematic-that is, they are buying less now or don't pay on time, etc. Then consider doubling efforts to find better customers.

Here's an example: One accountant I met had built up a substantial real estate clientele. But with real estate in the tank, he realized that he needed to find better clients, at least for a while. His new client base? Gas station owners.

Other business owners mentioned that they are focusing on selling to entities that are more recession-proof, such as the federal government. Business Matchmaking is a program that links small business owners with government procurement people looking for vendors.

3. Do the opposite: Most everyone is retrenching right now. Some small business owners see that as an opportunity. As Warren Buffet says, "buy when everyone else is selling and sell when everyone else is buying."

Consider: The market for a lot of things is low right now. It might be a great time to expand your real estate portfolio. For example, real estate is on sale. Car dealers are dying to move iron; maybe you can use that somehow.

4. Increase your online marketing: Several entrepreneurs tell me that they are having great success blogging and using other online marketing strategies like search engine optimization (SEO) and e-newsletters. Even better: These simple strategies are inexpensive, garner attention, increase site visits and allow you to brand yourself. I will also say that since launching my blog, Business as Unusual, traffic to my site has increased dramatically.

Other small business owners have had a lot of luck focusing on social networking. They say that sites like LinkedIn and Facebook allow them to meet potential customers, create relationships, and get new business.

5. Go old school: Other entrepreneurs are going back to the tried and true, using such time-tested marketing strategies as direct marketing, buying lists and leads, and cold calling. As one woman told me, "We dial for dollars!"

6. Prepare for the good times now: With business slower, this could also be a good time to think strategically. What plans or products could you work on to be implemented in the next year or so?

All in all, I am reminded of the immortal words of Paul Harvey: "In times like these, it helps to remember that there have always been times like these."