In the good old days when jobs were plentiful and budget always grew every small business would know what the customer wanted, that is why the business was growing nicely year on year. The way to grow was to find more customers for your service or product. But what happens in a recession?

Customers cut back their needs, and the competition starts to offer deals that can hurt your business. You can fight back, you will fight back. Life is tough but you will persevere. You will do this but there are other ways of winning new business. Consider another way.

Break down your business into its parts, then try and see all the alternatives for reconstruction. This is an exercise best done on paper with a colleague or two. List all the attributes of the business and the staff on the left hand-side, then try and see what happens if you try and rebuild the business from the skills base upwards. Will you still be the same business or are there other opportunities that thus far you have never seriously considered? Let me give you a simple example.

My window cleaner has a van with its own water container built in. He has ladders, and he is a general handyman at home. So if we forget he is a window cleaner he could be someone who mends roofs and windows. He is mobile and has a supply of water that could clean my car or clean my soffits (for which a ladder could be very useful). He also has the added advantage that he already has lots of trusted customers so when he sees an opportunity while cleaning windows he is first in line to put the roof tile back in place or clean the algae off my patio.

A lot of small businesses have skills and expertise that are not utilised 100% of the time. By setting time aside for a reconstruction exercise the small business manager gets to see all the potential in front of them on paper. From this you can develop a plan of attack. No longer are you fighting the competitors toe to toe, you are fighting with an advantage that secures your customers and wins over new ones.

This technique is very effective with small businesses. The speed at which new services or products can be brought to market by smaller enterprises means that by the time the competitors have twigged that you have got ahead it will be too late for them to stop you. Another point to note is that the number of ideas generated normally far outweighs the ones that get used. The remainder can be parked and reviewed when time allows.

This reconstruction exercise always seems to throw out at least one really wacky idea that is so different that it deserved to be revisited with a view of taking the business in a completely new direction. Two hours, a pen and a sheet of paper is all you need to start.

If you’re about to start a new business or currently running a small business, establishing a business credit is a great idea. The most important fact for establishing business credit in small business is that lending institutions, credit card issuers and vendors will establish business credit without the need of any personal guarantee. As everyone knows, a personal guarantee involves using your personal credit information to guarantee repayment of the debt incurred by the business. Well explained, you are fully responsible for the repayment of the credit. It doesn’t mean that you do not have to repay the cash obtained through business credit. It may be your intention to fully repay any debt incurred by the business; however, obligating your personal and business assets to repaying business debts can lead to financial ruin if any business setbacks occur.

You won’t be able to distinguish your business credit from your personal credit if you are the sole proprietor of your business. In order to establish business credit without a personal guarantee you must structure your business as a separate legal entity such as a corporation or limited liability company. Even if you have been doing business as a sole proprietor for years, you can restructure your business into a separate legal entity. Besides, it is a better choice to set your business up as an entity separate and apart from you. Your business could get sued and if all of your assets are tied together, financial ruin may be lurking in the background. Having a separate entity protects your personal assets.