Small businesses have had a challenging two years.  The slow down began towards the end of 2006 and became well noticed when the last official recession began in December 2007.  Now many small businesses are hoping the worst is behind, but the next challenge is right around the corner.  The next obstacle is more competition.

The unemployment rate is currently small business's worst enemy for two primary reasons.  First, high unemployment will cause people who cannot find work to start their own businesses.  Second, high unemployment will reduce consumer spending (which a lot of small business depends on).

What are some things you can do to prepare for this increased competition?

• Prepare for stable or lower revenues - Build cash balances aggressively and reduce short-term debts and accounts payable balances.
• Increase your Gross Profit (revenues less direct costs) - Improve work-line efficiencies and receive discounts from vendors.
• Increase Operational Efficiency (new equipment and processes) -  Work smarter, not harder and identify wasteful practices and correct.
• Increase Overhead Efficiency (reduce rents and expenses without losing value) - Review and potentially reduce employee count. Discuss with land lord rent reductions or move locations to reduce overhead. Merge with competitor or like-kind business to increase revenues and reduce total overhead (including employee count) for combined business
• Prepare for monthly revenue volatility - The consumer may still be volatile with purchases - in "good" months build cash positions to help with more challenging months.

To learn more you can read the entire articles "Preparing For More Competition".