THOUGH THE RECESSION MAY TECHNICALLY be over, continued lack of financing and a slow rebound--including sluggish sales, reluctant lending institutions, and unpredictable business conditions--have many entrepreneurs questioning this so-called recovery.
According to a 2011 Kauffman Firm Survey, 89% of businesses that applied unsuccessfully for bank loans in 2009 felt that tighter lending restrictions were to blame. The lack of access to capital to grow these businesses was also a likely source of slowed or lost sales (44%), forcing many businesses to default on the loans they already had or to close their business altogether. "These firms clearly continue to feel the effects of the financial crisis in terms of lost sales and inability to obtain needed funding," Robert E. Litan, vice president of research and policy at the Kauffman Foundation, stated in a press release. "To promote job creation and strengthen the economy, entrepreneurs must be able to access financial capital."
If loans to grow businesses are harder to come by, trouble revving up sales to pre-recessionary levels and securing other sources of cash might signal harder times are soon to fall on would-be entrepreneurs. An American Express OPEN spring Small Business Monitor survey revealed that the single greatest concern for small business owners and would-be entrepreneurs is cash flow: 66% are concerned they won't have enough to keep their businesses afloat, up from 53% in the fall of 2010.
"Small business owners have cut their companies to the bone in terms of expenses like staffing, and now they want to grow, but with growth comes cash flow concerns. It's a big concern to have enough money to pay the bills," says Alice Bredin, a small business adviser for American Express OPEN. "African American small business owners have concerns about getting new cash to bring in new business and opportunities. It's hard to have a great opportunity and not have the resources to go after it."
Here are recommended strategies to help your company regroup and bounce back.
* Innovation is key. Daryl Williams, director of Minority Entrepreneurship at the Kauffman Foundation, says entrepreneurs must become more fluid, mobile, and innovative, especially in tough times. "Out of this historical epoch must come a new wave of innovation surrounding how we do things, especially if we're not going to...