What Makes the Risk Less Risky?
The key for any small businesses grappling with a tough economy, whether they are cutting or increasing costs, is to make decisions with a larger plan in mind.
“You don’t want to just cut costs for the sake of cutting costs. You need to also find ways to grow while cutting back, or else it’s just a downward spiral,” said Abrams, the small-business expert.
Mei Zhang found this fact out the hard way. Ten years ago, Zhang started Wild China, a business offering high-end group tours through the country. In the first year her company was in operation, the terrorist attacks of Sept. 11, 2001, severely damaged the demand for tourism. Two years later, the SARS outbreak in China hurt business even more.
Each time, Zhang believed she had no choice but to cut costs, lay off staff and cancel trips.
“We basically just curled up in a fetal position and braced for the worst,” she said, remembering those times. She did nothing to expand or innovate her business, and instead suffered through the loss in revenue and customers.
When the global recession hit in 2007, Zhang knew it was time to take a different approach. Believing China was still a hot place to travel, despite the rocky economy, she decided to seek out more customers. In 2008, Wild China opened a U.S. office, hired additional staff and invested heavily in public relations. The company also took on more trade shows, buffed up its catalogs and social media presence and splurged to redo the backend of its website.
And this time, she is emerging from a crisis period better off than she entered it. Her revenue didn’t drop significantly last year, and it’s up this year by about 30% year over year.
“My previous experiences led me to believe that the bad times would get better,” she said. “It just takes a little bit of time.”
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