Entrepreneurs Demonstrate Resilience & Determination

The entrepreneurial spirit is alive and strong in the US. It’s a big part of what continues to draw people from around the globe to our shores. Across the board over the last 18 months, businesses large and small have had to step back and regroup in and as a result of this recession. That exercise in and of itself is a great opportunity to shift from the 20th century Information Age, as knowledge workers to the 21st Century Conceptual Age as creators and empathizers. This economic shift is an external force you had no control over, but you leverage it as an opportunity for success.

I’m not just talking about taking lemons and making lemonade. Yes, that determination and resilience is essential for small business success and prosperity. In fact the statistics from the Kaufmann Foundation on Entrepreneurship and even the IRS prove that during ‘tough times, the tough get going’, by building their own businesses or redefining their existing business to adapt to the evolving market. It’s part of the DNA of entrepreneurship. It has to go deeper into the essential purpose and value of your business in the marketplace and your commitment to service your customers.

Network Solutions and the University of Maryland’s Robert H. Smith School of Business surveyed small business owners in December 2009. They published State of Small Business Report in January 2010. It was posted to the web in February 2010.

http://growsmartbusiness.com/wp-content/files/SBSI_February_2010.pdf

This 50 page report is a wealth of information to help you regroup and strategize your next steps in this economy. They offer substantive insights for business owners to take to heart and consider in their own business in order to focus efforts on what will bring the most success.

Business owners are:

  • Increasing efficiency
  • Competing by offering superior service and creativity
  • Embracing social media to engage with customers and tap knowledge resources

While “The prolonged recession has restrained the ability of small businesses to improve their situation.”; they also found that “The more competitive a small business is, the more likely it is to meet the personal and business goals of its owners and show positive financial results.” (p3) That’s the win-win we all want.

The major ways that small businesses are differentiating themselves from competitors are through:

  • Superior customer service (78 percent)
  • Higher quality products and services (76 percent)
  • Creative ideas to address customers’ needs (65 percent)
  • Lower prices (44 percent)

Notice that the top three ways are by increasing the value proposition for the customer. Lowering prices is a distant 4th place. The report goes on to say: “superior service and creativity are correlated with competitive success, while quality and low prices make little difference to small business success.”

We all know that cutting prices is not sustainable; this report confirms that competing on price alone will not ‘save’ a small business.

The economic downturn has affected small business in a number of ways. Some are very positive:

  • Find ways to operate more efficiently 72%
  • Find new products and services to benefit customers 47%
  • Become a better team 43%
  • Reduced inefficient or unnecessary staff 31%

Some have been harder or impacted overall success more deeply:

  • Discount products and services 52% (which correlates with failure)
  • Hurt company morale 43%
  • Accept a lower standard of living 42%
  • Make pay cuts 35%
  • Reduce employee benefits 29%
  • Shorten the work week 25%
  • Reduce valuable staff 23%
  • Implement furloughs 13%

The strategic planning lessons small businesses have learned in the past 12 months are apparent from the answers to the question about their top priorities when the economy improves. Small business owners said their top priority will be:

  • To replenish owner savings 20%
  • To purchase equipment 17%
  • Marketing 16%
  • To build a larger emergency fund for the business 11%
  • Information Technology 8%
  • Additional staff 7%
  • Personal amenities for owners 6%
  • Training for owners 2%
  • Training for employees 1%
  • Other 7%

I encourage you to read the full report for more ideas you can use now in your sole proprietorship.