How to survive and prosper in 2008

With 2008 promising to be an interesting year, suggestions from two top small business counselors on how to survive and, even, prosper are worth noting: Watch the balance sheets (yours, your competitors' and, in B2B situations, your customers') and take advantage of opportunities that come along during difficult periods.

The advice comes from David Gay and Raman Chadha. Both think the timing could be right for some market-grabbing strategic moves.

"The competitive landscape changes," says Chadha, executive director of the Coleman Entrepreneurship Center at DePaul University's downtown campus. 2008 could be a "great time to start a business or investigate new opportunities."

Gay, manager of the Illinois Small Business Development Center at College of DuPage's new offices in Lisle, notes: "There is always opportunity, even in dark times. If you have cash and capacity, you can take advantage of others' distress (and perhaps) pick up customers, equipment or supplies at 'close out' prices."

Of course, there is the little matter of keeping your own business healthy. Gay has some survival-mode thoughts:

• "Cash is king," Gay says. "Conserve your cash by reducing inventory, accelerating collections and taking advantage of discounts or terms" suppliers offer - or deals you can negotiate, a relatively easy task if you're a vendor's key account.

"Consider accelerating your cash receipts by working with a factor," especially if "you're not capable or comfortable" monitoring customers' credit, Gay adds. (Factors buy receivables for cash -- but at a discount.)

• Keep an eye on customers' credit reports and D&B ratings. "Be careful about shipping to new or financially weak customers on credit," Gay warns.

Similarly, keep an eye on your suppliers' status. If a supplier falters -- or, worse, folds -- you may not be able to meet commitments to your own customers.

• On the other side, "Make sure you're current with suppliers," Gay says. He adds that it might be a good idea to "apply for credit with suppliers while your financial statements are in good order. (Think about) extending lines of credit through your bank, especially if you don't need the line right away."

• Don't stop marketing. "When things start to slow down, marketing is frequently among the first items to be cut," Gay complains. "Why? Because marketing is often viewed as a discretionary expense," he asks and answers.

"Marketing," Gay counters, "is an investment that, if applied properly, has an immediate return. In slow times, be diligent about where and how your marketing dollars are spent. Make sure they are allocated to events, publications, advertising or direct sales that will generate the most bang for the buck."

• Redouble efforts on customer service. "Retention of existing customers (and perhaps expanding sales to them) is far easier than finding new customers," Gay points out. "If you can retain your existing client base, you'll be ahead of the game."

© 2008, 121 Marketing Resources Inc.