Keep in business

By Beth Pratt
Small Business

Six months ago, I did a column on how to thrive during a possible economic downturn. Today there are few businesses, small or large that has escaped the impact of this current recession. This is the time to develop a plan and use as many resources as possible to keep your business vital.

Organizations, like the chambers, SCORE and the Workforce Investment Board, are available to help during good times and bad. Napa Valley College Small Business Development Center Business advisor’s can provide business owners with the guidance and resources to keep in business — and at no cost to you. During an economic downturn small businesses need to take the opportunity to re-evaluate their business model and develop strategies to maximize profits, maintain cash flow, retain and diversify clientele and continue to motivate employees.

Napa Chamber of Commerce and the NVC SBDC understand the critical issues that are currently facing small businesses and are partnering to provide the next Wake up Your Business Wednesday on “Strategies, Plans and Resources to Get Through Difficult Times.”

The event, on Jan. 21, 7:30-9:30 a.m., at the Napa Chamber of Commerce Board Room, will provide attendees with the information needed to stay in business and resources available to help through these tough times.

For more information go to www.napachamber.com or call the SBDC at 253-3210.

It is important to have a strategy.

The first step to maximize profits is to really understand your profit and loss statement and get a handle on operating expenses. In a growing economy we often have the tendency to focus on sales. In a tighter economy, the focus shifts to increased gross profit margins. Yet increased gross profits become awash if we fail to minimize or reduce operating expenses.

I like to refer to this as “bottom-line” marketing. The combination of keeping our eye on increased profits and reducing operating expenses will provide a positive bottom-line.

At the same time entrepreneurs would be wise to keep their eye on cash flow — the oil that lubes the engine of your business.

Three ways to improve your cash flow include establishing and enforcing a business credit policy, negotiating with vendors and creditors for both account receivables and account payables, reviewing inventory and inventory turn-over.

Another strategy is to focus on your customers and providing exceptional customer service.

A tight economy gives your clientele the opportunity to be picky about the product service they are experiencing.

This is the time when retail and service businesses can stand out by providing outstanding service.

By coaching employees to provide stellar service, a business can keep valuable customers and ride out the downturn.

The final strategy that consumers and local business owners could consider is to buy local.

 Buying locally produced goods and services contributes three times the amount of funds into our economy.

We are all impacted by an economic downturn and this is one small way we can bolster our local community.

If your need help with your business please call the NVC SBDC at 253-3210.

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