Ask Steve

It’s the economy. Enough said. Rough sailing ahead or partially clearing skies -- either way some fiscal and business prudence will us all help weather this storm.

Merle from Albany, NY: Any suggestions for helping my 5-location dry cleaning and laundromat franchise make it through tough times?

No one should minimize the impact of a recession on all sorts of SMBs including services companies. That being said, SMBs can take solace in knowing that over the past 8 or so recessions SMBs have generally come out of recessionary times faster than large enterprises.

My advice for surviving tough times falls into three categories.

1. Prudent business ideas irrespective of economic weather - Whether bull or bear market, you need to watch your financials. And in particularly rough economic climates review your financials every week. Often customers who buy on credit slow down their payments which can quickly have a material impact on your receivables. Be understanding yet firm with customers who buy on credit by setting clear payment terms and timelines.

Another good business idea is to review your marketing mix. Let’s all reflect back to those Marketing 101 classes. A marketing mix includes your products, pricing, promotions and distribution channels. Sometimes your products need some tweaking during recessionary times -- maybe some new packaging even. Do you do laundry delivery? Maybe you could use some of your current employees -- equipped with company-sponsored GPS-enabled Smartphones -- to make deliveries. The technology would minimize wrong turns (and gasoline costs) and keep them in touch with you via email while they’re on the road. Maybe the devices could also log customer pick-ups and email itemized receipts to customers. Another thought, consider adding a micro-sized product/service to your portfolio -- a product that might appeal to budget conscious consumers in tough times. Also consider changes to your promotions, advertising and market messaging. Are there special promotions to increase laundry loads per customer or the overall number of customers using your establishments?

2. Smart revenue enhancers – During bad economic times people spend a lot more time at home. Without as much discretionary income, potential customers sit at home and pretend to be entertained. Do you have a website? Do you do online or other types of advertising? Is there now an opportunity for you to explore e-commerce offerings? Those prospective customers sitting at home are probably surfing the Internet.

Bad economic times also allow you to focus on increasing customer satisfaction. Do your establishments have free WiFi that customers can use while waiting? How about a flat-screen TV on the wall with a Wii (and charge 25 cents for 5 minutes or buy-one-game-get-one-free)? Would patrons find Guitar Hero more entertaining than the spin cycle? There are plenty of small technology consultants who can help you set-up a reasonably priced entertainment and broadband Internet area in your establishments.