📺 Stream EntrepreneurTV for Free 📺

Advice for Small-Biz Owners

By Mike Werling

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


It's no secret there's plenty of bad news about the economy and the state of business. The recession and its impact on business are making headlines every day. As with any economic slump, plenty of people have plenty of questions about what they can do to survive.

One organization is helping business owners in Southern California survive and even thrive. The Santa Ana District Office of the U.S. Small Business Administration and its resource partners, Orange County SCORE Chapter 114, Orange County Small Business Development Center and the Orange County Women's Business Center, have joined forces to form "tiger teams" to help small businesses that need assistance during these tough economic times. Tiger teams consist of representatives from each organization, who are selected based on the needs of each business. The tiger team will meet with businesses on-site to analyze their operations and make recommendations to help them stabilize and improve their businesses.

I asked one tiger team member his thoughts on the downturn and what biz owners can do to make it through. Brad Mix is an SBDC counselor and consultant who specializes in financing and loans.

What are the most common problems you are seeing right now?

During the past economic growth period, hyper-stimulated by a strong real estate market and anything related to real estate, many businesses grew too rapidly and got overextended. Now the SBDC is helping them become "right sized."

In addition, many businesses are suffering from increased or unaffordable occupancy costs; they either bought an over-priced building or their landlord bought an over-priced building. As a result, they cannot afford their mortgage or monthly lease payments.

For example: A number of local veterinary hospitals built their own buildings within the last six years. They had to increase their prices 300 percent in order to cover their occupancy costs. Unfortunately, most businesses, especially in the retail industry, can't raise prices and are being forced out of business from excessively high rent payments. Now even the veterinarians are starting to feel the impact of the recession.

If you had a couple pieces of advice for struggling business owners in this climate, what would they be?

1. In all business recessions, like in nature, there will be a natural and healthy thinning of the herd, where the strongest survive. This is an ideal opportunity for the better run companies to gain market share as other businesses struggle or go out of business. If you are financially healthy, this is an ideal time to buy out a competitor at a reduced price.

For example, during the past real estate orgy, there was an over saturation of real estate agents. Now the excess of real estate agents is gone, and the real estate agents that stay in the game will have positioned themselves to be market leaders.

2. The overwhelming consumer trend, even with affluent consumers, is to cut back on spending on high-end items. Therefore, businesses need to offer specials or moderately priced products. For instance, in Palm Springs, Calif., where there is a restaurant on every corner, moderate and low-end restaurants are better surviving the economic downturn than high-end restaurants.

3. With the rising unemployment rate, many people are looking at starting a business, not out of choice, but out of necessity. They can't find a job so they are looking to start a business.

For people starting a business, it's important to consider both industry and market trends. Some businesses actually do extremely well in poor economic conditions. Currently, locksmiths are cashing in on the real estate foreclosures. Look to start a business that is less economically sensitive.

Mike Werling, the managing editor of Sea Magazine, has written for Entrepreneur.com, Senior Market Advisor, Boomer Market Advisor and Broadmoor magazines.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Growing a Business

If You Aren't Betting on the Media Industry, You Are Losing a Competitive Edge — Here's Why.

Building or acquiring media assets is an increasingly popular strategy adopted by creative entrepreneurs and startups looking to leverage the industry's unique characteristics.

Science & Technology

AI Is My Meal Planner, Editor, Assistant and More as a Working Mom — Here's How You Can Use AI to Conquer Multitasking, Too.

Generative AI tools like OpenAI's ChatGPT can assist a mompreneur's work and personal life by helping them get through their to-do list and have more time for themselves — the gift that every working mom wants.

Business News

Elon Musk's X Finally Has a Domain That Matches Its Name

Musk bought the X.com domain from PayPal years before buying then-Twitter.

Side Hustle

These Coworkers-Turned-Friends Started a Side Hustle on Amazon — Now It's a 'Full Hustle' Earning Over $20 Million a Year: 'Jump in With Both Feet'

Achal Patel and Russell Gong met at a large consulting firm and "bonded over a shared vision to create a mission-led company."


Take Your Content Creation Sky High with Two 4K Drones for $160

Each drone in this deal comes with dual cameras, obstacle avoidance, and other fun features.


Want to Be More Productive? Here's How Google Executives Structure Their Schedules

These five tactics from inside Google will help you focus and protect your time.