While economic wizards try to rescue America from the worst economic downturn in 70 years, New Mexico is doing what it can to bolster small businesses, because the state’s recovery depends on it. The most recent data from the U.S. Small Business Administration’s Office of Advocacy show that New Mexico’s 36,430 small businesses employ 96.2 percent of the state’s work force and created 54.3 percent of new jobs between 2004 and 2005.
Many New Mexico businesses are suffering the effects of the high-risk business practices — easy credit and poor planning and oversight — that characterized much of the past few decades in our nation. Some have been destroyed, others merely wounded, by the contracting economy.
Whatever the future holds, businesses must end the reckless practices that got us in this mess. The expectations of easy money and instant gratification must yield to more sustainable and realistic attitudes and practices, including the following:
Return to common sense: Our ancestors made a living with the resources at hand. They worked hard, wasted nothing (including time) and were loath to buy nonessential goods on credit. Such old-fashioned virtues are helping families survive on reduced incomes.
Control costs, curtail credit: Businesses should reduce or eliminate unnecessary expenses and pay off loans, mortgages and other debts. Expensive habits should be broken, money should be saved and materials recycled or reused.. High-interest-rate credit cards shouldn’t be used for routine expenses.
Seize the time! Walt Disney and Bill Gates began their businesses during recessions by planning carefully and thinking frugally, thus proving that opportunities exist amid crisis. Small business owners must adjust quickly to changing circumstances and act on opportunities.
Plan for a new reality: When revenues dwindle, managers must pause to revise the business plan in light of market changes. Many turn to recession-proof products and services — the essentials that people can’t — or won’t — do without.
At your service: Good, cheerful service costs a business nothing extra but can boost revenues and build the customer base. Customers trust businesses that anticipate their needs by keeping high-demand products in stock, and they appreciate those that offer value when discretionary cash is sparse.
Polish skills: Many people are returning to school and otherwise diversifying their skills and knowledge in order to be more marketable to employers. A business owner should consider advanced training or education that could take the business to a more profitable place.
Communicate with employees: Recessions can undermine employee morale and breed insecurity and resignation. To counter a downbeat atmosphere that stifles ambition and success, a manager should communicate with employees and involve them in business decisions.
Stop worrying and start selling: Obsessing about economic forces beyond our control wastes time that’s better spent running and building a business. A business owner who stays optimistic and positive will see what’s possible in impossible times.
Help is here: The state’s Small Business Development Centers can help business owners find their way through a changing landscape. Visit the organization’s Web site or call 1800-432-4406.