By Chelsea Hadaway
chadaway@scbiznews.com

Staring down a road of declining numbers and a weak economy, small businesses are being forced to take a hard look at their most basic operations.

And with consumer spending slowing and credit drying up, companies are being forced to re-examine their next steps.

“These well-established companies are coming in with cash flow problems,” said Paul Thomas, senior manager for the Small Business Administration office in Charleston.

“They have to take a hard look at what they should do next.”

The good news is that there’s a strategy for coming out ahead.

“This is a time when education becomes especially important,” said John Clarkin, director of the Tate Center for Entrepreneurship at the College of Charleston. “The better-informed you are, the better decisions you’ll make.”

The first step Clarkin recommends business owners allocate time to gaining information and education. He says businesses relying on information rather than gut feelings will come out of the slump successful.

Take advantage of resources such as the Service Corps of Retired Executives and the Small Business Development Center, he said, and seek out programs that will help you manage more effectively, make better financial decisions and maximize resources.

In addition to being analytical and informed when mapping out a strategy, Clarkin suggests looking at your business’s products and the services you offer, determine which ones are essential and focus on those. Once you decide what to focus on, “do it very very well.”

“We still buy things, we still drive, we still eat,” Clarkin said. “Consumers are making value judgments with a lot more discretion now.” So by providing consumers with the most value for the money, companies can actually expand their client base in a down economy, he said.

Back to Basics
Small businesses that are struggling with cash flow problems, the securing of funding or stagnant sales are not alone. But not all businesses are tapping into the help that’s available.

“There are so many resources that are either free or cheap,” said Virginia Hinnant, who teaches at the Tate Center and in the FastTrac program. “If you get these resources to help, it’s not so overwhelming.”

The wide variety of resources includes education-related programs and government-funded organizations. In a partnership with the Small Business Administration, the Charleston SCORE chapter harnesses the knowledge of 45 retired executives to provide free consulting services at its office in the Charleston Metro Chamber of Commerce.

"SCORE helped me enormously with my business plan,” said Judith Miller, CEO of the Charleston Cookie Co. “I had never even opened a spreadsheet before.” Her SCORE counselor taught her how to work with one and to create a three-year cash flow projection.

Tom Lauria, area manager for the USC Small Business Development Center in North Charleston, has been seeing more existing businesses seeking help to figure out ways to maintain cash flow and get over the hump.

And often, not only can these assistance organizations assess the numbers and determine what the next steps should be, but they know of ways to secure funding.

The SBA is accelerating its Community Express program, which makes $25,000 loans for businesses, and is introducing a new loan program for rural areas, Thomas said. He advises making sure all documentation is prepared before starting the process and checking credit scores every year.

Free education
Another overlooked resource is the Tate Center and the business school at the College of Charleston.

“Colleges and universities are a huge resource for the community,” said David Desplaces, a professor of entrepreneurship in the business school. Through the Entrepreneur’s HelpDesk program and his small-business management classes, students take on local businesses as clients and analyze their operations, provide a review and offer solutions. He calls the concept of higher education institutions providing resources to develop and support the local economy “economic gardening” and says it is a win for the students, the businesses and the local community.

Hinnant and Clarkin have been developing new programs at the Tate Center for Entrepreneurship called “Venture In” and “Venture Out” that provide ongoing support and education to small businesses at a low cost.

A big gap exists between having revenue and being able to afford the support for legal services, marketing, financing, etc., Hinnant said. These programs bring in experts and help show smaller businesses how to conserve their resources for what’s important.

Hinnant gave the example of knowing how to write a contract before walking into an attorney’s office and spending only an hour to hone it, versus going into an attorney’s office and writing a contract from scratch, taking several hours and thousands of dollars in hourly fees.

When Hinnant started her businesses, she turned to these small-business resources to help her launch them. She learned the ins and outs of maximizing resources and says she has realized the value of the tools that are out there.

“Use them as much as possible,” she said. “Please go to SCORE, the SBA, the SBDC. Just wear them out.”

Reach Chelsea Hadaway at 843-849-3142.