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Small businesses strive to stand out from the pack

In a competitive market, businesses get creative in their approach

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By Ed Richter, Staff Writer Updated 2:57 PM Friday, March 12, 2010

Prior planning and finding creative ways to stand out among the competition will be key for a small business to survive in 2010.

Steve Jacobs, president and CEO of Access Business Development and Finance in Liberty Twp., said businesses will have to plan ahead for capital needs and finance as well as finding ways to distinguish themselves and be aggressive in their presentations with customers in a very competitive marketplace.

“Businesses need to be more creative in how they differentiate themselves from competitors,” Jacobs said. “Customers are becoming more careful at all levels in how they are spending their dollars. Businesses need to be more aware of that fact and how to come to the forefront in the marketplace.”

Jacobs said there has been an increased number of business failures and there are still concerns about where the economy is going.

As customers are becoming more conservative on where they are spending their dollars, he said businesses need to be aware of the smaller pool of customers and how to convince them to spend their money.

“Consumer confidence is coming back, but it’s going to be gangbusters like it once was,” Jacobs said. “I think more businesses will be thinking more about discretionary spending than they used to on how and where they’ll spend dollars more wisely until things turnaround.”

He sees thing changing slowly during 2010 but added that business inventory is starting to get low because customers have held off buying for as long as they could. Jacobs said there is an up side because that will require people to be called back to work to manufacture goods to replace the depleted inventory.

“You’ll see a slow turnaround but people still need to feel more confident to buy something now rather than next year,” he said. “A lot depends on how secure they feel about their job or if they can find a job.”

A big proponent of strategic planning, Jacobs said small businesses need to have a plan on how to weather the slow economic recovery.

“Business owners need to look at their capital reserves and anticipate issues sooner to avoid not being able to get capital funding if needed,” he said. “Businesses need to be planning or they’re going to have tremendous difficulty.”

Jacobs said those businesses who have prepared a plan early on will know what they’ve done since 2008 as they have already planned ahead to anticipate needs.

“If they’re just starting to look at it, they could have problems,” Jacobs said. “They need to know what actions to take over the next six to 12 months and come up with ‘good, bad and worse scenarios.’”

Matt Eisenbraun, a director and business advisor for the Ohio Small Business Development Center at Biztech with offices in Hamilton and Middletown, said a lot of small businesses are working to streamline and be more efficient to save money as well as looking at getting into different market segments.

He said one thing that is key for small businesses to survive is to make sure their community knows who they are and what they’re doing.

“They need to market and network themselves to let people know what’s going on,” Eisenbraun said. “They also need to get local customers in addition to their key customers that small businesses start off with.”

He said a lot of small businesses are “hunkering down” as they are nearing the bottom of their cash reserves. It also makes it that more important to find new customers or business operating loans to get them through the tough economic times.

“It becomes a question if a business has the finances to weather this financial storm,” he said.

Among things small businesses can do to weather the storm are forming strategic partnerships that compliment a business.

For example, Eisenbraun said a car accessories shop could partner with a tire store, a body and paint shop, a mechanic and a car alarm company, and work together to develop a marketing plan to approach the same customers as well as leverage their cash for advertising and other expenses.

He said many companies that were not prepared have already gone under and there are many that are reaching the end of their capital reserves unless the economy begins to rebound or more lending becomes available.

“Businesses also have to make sure every decision makes financial sense,” he said. “This could be a good time to expand but is it affordable?”

The Small Business Development Centers of Ohio is a partnership between the U.S. Small Business Administration and the Ohio Department of Development.

Contact this reporter at (513) 696-4504 or erichter@coxohio.com.

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