Top SMBs find ways to prosper in economic uncertainty 10 February, 2009 By Erin Bell

From an IT perspective, panellists agreed that technology is able to help businesses in various ways, including improving processes; reducing the cost of managing infrastructure, people and activities; getting more out of existing resources; realizing new business opportunities; and improving productivity in the broadest sense with tasks such as decision making, communication, and task delegation.

"Many Small businesses say they'll invest in technology when they grow, when in my experience companies should invest in technologies to grow. And we're encouraging business to invest in technology now," said Eric Gales, vice-president, Small Business and Midmarket Solutions & Partners, Microsoft Canada.

The panel acknowledged that making investment decisions in times of economic uncertainty can be tough, and during such times it's fundamental for businesses to focus on cash flow. However, according to Christianne Parris, vice-president of Client and Business Strategy at RBC, certain businesses shouldn't rule out investment.

"Companies now should be aware of what's happening in the market, look at their plans and make sure that what they were going to do for 2009 is still relevant," Parris said. "Small companies have the benefit of being agile and able to react quickly. For the companies and entrepreneurs that have that mindset, it can be a tremendous time to invest."

Parris also dispelled the myth that SMBs no longer have access to credit. "Actually, they do," she explained. "Where the access to credit has dried up is the capital market side, or wherever you had captive leasing companies... Yes, that market has dried up unless you're leasing directly from your bank."

One business that is thriving in the current economic climate is homebuilding company Fusion Homes, which has experienced 430 per cent growth since 2003. According to Fusion Homes president Lee Piccoli, the company's slowdown plan involves not compromising its competitive position, keeping its talent, and investing in things that would allow it to take a dominant position in the marketplace after the slowdown is over.

"I think it's natural to fear the unknown, but we're looking at this slowdown as a time of incredible opportunity," said Piccoli. "In any slowdown you're going to see a levelling of the playing field, a cleansing of the industry, some of your competitors weakened -- and that creates an opportunity for some of the smaller companies to take a more dominant position."

Piccoli suggested software implementation as an example of a project that companies could undertake during the slowdown: "My experience with software implementation, is that it's really time consuming for your managers," he said. "There's no better time than now, when things are slow, to take on projects like that."

Brian Monteith, master franchisor of small business and mobile professionals service provider Intelligent Office, said that it will always be an SMB's responsibility to cut costs. One of the ways he suggests doing so is by promoting the idea of working from home.

"With the economy now, people are getting away from the idea that the office is somewhere you have to drive to every day, which is something that is very stressful in the day to day business. Work is something you do, it's not a place you have to be at," Monteith said.

Harry Rosen, the executive chairman of Harry Rosen Inc., stressed the importance of cultivating customer relationships and loyalty. Working in the menswear industry since 1952, Rosen developed a system early on of keeping records of everything customers purchased, as well as details about their hobbies, families and peer groups so that he could recommend clothing based on their lifestyles.

During the recession of the early 1980s, when many clothing merchants "traded down" and introduced lower priced lines, Rosen instead put out a manual called "The Complete Guide to Dressing for Men", designed to help men look good as they searched for new jobs.

"I reversed the trend happening with other merchants and capitalized in a down market," Rosen said, adding that he believed in spending money to send his managers and top sales staff to trade shows and educational trips overseas. "It's very expensive, but it makes career people out of them; it makes them fully informed about their customers."

In times of economic uncertainty, it's essential for companies to keep their business plan relevant and up to date, stressed Parris.

"A business plan isn't a static document that you prepare once a year for your banker just to please him or her," Parris said. "It should be part of the company's DNA, and it should be re-evaluated at least quarterly, or if there's something that happens in the market that warrants re-evaluation."

According to Parris, these are the pieces of business plan information that companies should be scrutinizing:

Look at your talent and expand it -- "Six months ago it was really hard to recruit good people because they were all taken up and expensive. Now there are people available, and they might be cheaper, and they might have skills that SMBs can capitalize on."