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Tuesday, June 18, 2024
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Q: Why are small businesses struggling?

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Firstly, keep an eye on your product line. Check to see what's moving and what isn't. This is even more important if you've changed product lines since the pandemic. Image for illustration purposes
Firstly, keep an eye on your product line. Check to see what’s moving and what isn’t. This is even more important if you’ve changed product lines since the pandemic. Image for illustration purposes

Texas Border Business

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Pamela Kaur Assistant District Director and SCORE Mentor

By Pamela Kaur

We currently have a tale of two economies. There are businesses doing very well and others struggling. Does this mean you should change your product or service offering? Not necessarily, but it does mean you should pay close attention to cash flow.

The landscape has been changing rapidly over the last few years. High inflation, supply chain issues, worker shortages at one end and pent-up consumer demand at the other.

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And it’s harder for small businesses as they lack the deep pockets and fund-raising ability of larger companies.

So what should they do? 

Firstly, keep an eye on your product line. Check to see what’s moving and what isn’t. This is even more important if you’ve changed product lines since the pandemic. 

Secondly, check supplier costs, and depending on lead times, do just-in-time ordering. You don’t want to run out of inventory, as you don’t want your customers going elsewhere. But you don’t want to stockpile inventory either. That’s tying up cash that you might need to adapt and tweak your product line. In the current market environment, nimbleness pays.

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There are also two other things you should do. 

Be willing to abandon what doesn’t work. Don’t fall so in love with your ideas that you’re not willing to let it go if it doesn’t work. Have the courage to walk away before it becomes a handicap. The energy you release will allow you to have an improved focus on the next target.

Make frugality a company value. Just because you received a grant or acquired a loan, doesn’t mean that you should spend it right away. People say, you need to spend money to make money. However, that doesn’t mean uncontrolled spending. In it’s early days, Microsoft was extremely frugal.

Simplify and stay focused on what you know and what you do best. In other words, stick to the knitting. Stay focused on your core product or service. Keep your bread-and-butter customer happy. Don’t get caught up in hype. Boring pays.

Pamela Kaur is an Assistant District Director and SCORE Mentor, and in her real life, leads business turn-arounds and strategy for a hedge fund. She can be reached at pamela.kaur@scorevolunteer.org 

SCORE, an arm of the SBA (Small Business Administration), provides free workshops and mentoring for small businesses. If you have any questions about your business – structure, funding, cash flow, budgeting, employees, marketing etc please email us. We have 10,000 mentors across the country who are SMEs.

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