Special
Report: Global Financial Crisis
by Jing Zhao Cesarone
CHICAGO, May 5 (Xinhua) -- U.S. entrepreneurs are
adjusting to the current economic environment and are trying to seek new
opportunities.
"By and large, no company is doing as well as it was,
regardless of size," Lloyd Shefsky, a clinical professor of entrepreneurship at
Kellogg School of Management, said.
Bob Billow, managing director of Billow Butler
Company, L.L.C., a middle market investment bank, said: "All across the spectrum
of industries, small and medium sized businesses have been especially impacted
by this very negative environment in which they are operating presently. We can
see the pervasive effects of this challenging credit environment impacting so
many firms up and down their supply and distribution channels."
R. J. Seidel, owner of an Asian antique store in
Chicago, said:"No question we've felt the slow down. I can't say the economic
impact on small businesses is greater than that on larger businesses; but it's
the small businesses in many local economies that are most affected and are most
likely to feel the pain."
However, Shefsky said some smaller companies are
prepared because they have not accumulated mass, and the result is they have
staying power. "The small and medium companies may even benefit by picking up
customers of competitors who are less prepared," he said.
Indeed, many believe that the economic downturn also
presents them with unique opportunities. They feel that it is time for
entrepreneurs to have a long-term vision and expand their possibilities. When
the economy starts showing glimmers of light at the end of the tunnel, existing
small and medium sized companies will be in a position to take advantage of the
economy.
"You should never miss an opportunity in a time of
crisis," Billow said, quoting an ancient Chinese saying. "When other people are
pulling back, it is the best time for a business to build itself up and further
strengthen and even consider expanding its core focus. If a firm has sufficient
resources it should consider how to best develop and expand on its model for the
long-term."
He listed a few things they can do such as building
IP competitive advantages, recruiting good people with necessary and
complementary talents, implementing marketing and brand promotions and, for
manufacturers, investigating improvements in cost structure by finding an Asian
product source or partner.
Shefsky advised entrepreneurs to spend time thinking
on how to cut unnecessary expenses, pay attention to how their competitors are
doing and, if possible, consider it a good time to upgrade -- personnel,
distributors, suppliers, etc. which were previously not available. "Have a board
to guide you with their experience." Shefsky said.
Seidel has been doing a lot of thinking recently on
how to survive and even thrive in this economy. "We've focused on sending out
more frequent and professional looking emails. We've recognized that while there
is a good percentage of customers who have tightened their purse strings there's
still a percentage of individuals spending. These people have now become our
target market. And, we've shifted our marketing efforts and our inventory to
take advantage of this reality."
Seidel is optimistic about the future. "We will
continue tweaking our business plan to make better use of marketing
opportunities and the media to attract more affluent shoppers."
Anita Tang, managing director of Royal Roots Global
Inc., a cross-border business strategy advisor, pointed out the importance of
building an international strategy with a strategic network.
"The global economy connects different countries and
regions, and economic cycles impact economies around the world in various
degrees. A good international strategy and strategic network can help defuse
certain negative impacts and open doors to business opportunities outside of
your geographic territory," she said.
Another "think-outside-the box" business strategy was
recommended by Stella Y. Su, director of corporate finance consulting and head
of China practice at Blackman Kallick. She pointed out that a Chinese buyer or
investor could help small and medium U.S. companies realize their maximum value.
Su said that with the Chinese government's
encouragement of overseas investments, the abundance of capital, and the weak
U.S. dollar, Chinese companies are investing in more and more American
businesses in virtually every industry.
Tang said that U.S. businesses have to be proactive
in working with foreign parties by providing them with a strong value
proposition. "Even though China is cash rich, it has many investment options all
over the world rather than just in the United States."
Looking at the future, Shefsky predicted that
initially many existing companies will disappear. At the same time, many
laid-off people and graduates without jobs will start their own businesses. Some
will succeed at a higher percentage than they usually do because,
percentage-wise, more of the fittest will start new businesses, since the less
fit may be more careful, Shefsky said.
However, Jim Blasingame, a leading business expert
and host of the Small Business Advocate radio show, as well as a small business
owner, believes that new start-ups will not be as robust during the recovery
compared with those in the 1990s, simply because of the lack of credit. New
start-ups will no longer get easy funding from their credit cards, home equity
loans, and 401K plans like they previously did.
On the other hand, it will be good news for existing
businesses which will have a much larger pool of talent and less competition in
the market, Blasingame said.
A recent survey conducted by the University of
Maryland's business school and Network Solutions revealed that America's small
businesses are succeeding despite the economic downturn with69 percent being
profitable in 2008 and 7 percent breaking even.
Other research conducted by the American Express Open
Small Business Monitor discovered that four out of 10 entrepreneurs are
optimistic about the economy this year and feel it will provide opportunities
for their businesses.
Moreover, nearly "all of these glass-half-full"
entrepreneurs (92 percent) say that managing through the recession has made them
a better business owner, compared to 77 percent overall.
"Existing small business will be the force to bring
this economy out of the recession," Blasingame said.
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