Although some economists claim the recession is over, it certainly doesn’t feel like it for most entrepreneurs. Despite signs of a rebound, a number of businesses must fight to keep the lights on.
Recent statistics promise it will be a bumpy ride to recovery. Corporate clients and consumers, for the most part, continue to hoard cash. Credit is expected to remain tighter than a miser’s wallet. In fact, the Federal Reserve Board’s recent survey of lending practices of U.S. commercial banks found that 35% of these institutions have tightened standards on small business loans. The SBA reported that through Aug. 14, only 36,055 loans guaranteed through its 7(a) program were approved this fiscal year—a 43% decline from the same period a year earlier. As a result, the body count has mounted: according to the American Bankruptcy Institute, more than 30,000 companies filed for bankruptcy protection during the first half of 2009, a 64% rise from the same period a year ago.
I didn’t paint what may appear to be a bleak picture so you would call it quits. I just don’t believe in sugarcoating tough situations. Since last year, I have been bombarded by e-mails, phone calls, and drive-by chats from young entrepreneurs who seek the magic formula for survival. First, I tell them that no such blueprint exists. Then I let them know they’re not alone. Believe me, I know every twist and turn on the road you’re traveling. Black Enterprise has not been immune to today’s challenges. But I decided to meet them head on. And you should, too.
Yes, I believe the economic recovery will arrive soon but it will take a while before many of us reap its benefits. Now is the time to position yourself for the future. Take stock of your company and operate in a mode that will not only preserve the business but will also burnish your reputation—your reputation represents your most valuable asset.