Dear Karen: I've already cut staffing. What else can I do to reduce the chances that my company will go out of business?
Answer: Many businesses are experiencing weak demand for their products and services.
"Nobody really knows when that demand is going to return and, if it does, at what level," said Ken Esch of PricewaterhouseCoopers' Private Company Services practice.
Consider renegotiating your long-term supply contracts and consolidating vendors. "Use one vendor for all your office supplies and leverage your purchasing power," Esch said.
Explore taking on a partner as an additional source of capital or entering a joint venture agreement with a supplier or even a competitor.
"Small firms are really turning over all the stones at this point" to ensure that they make it through the recession, Esch said.
How to handle suspected fraud
Dear Karen: What should I do if I suspect a fraud at my small business?
Answer: Employee fraud costs U.S. companies about $994 billion annually, according to the Assn. of Certified Fraud Examiners. Historically, as markets go down, employee fraud goes up.
If you suspect or discover fraud in your company, hire an experienced investigator to look into it, said Nidhi Gupta, leader of the fraud prevention practice at BDO Consulting in Atlanta. Separate anyone you suspect from your company's assets, books and records.
Your investigator should help you conduct background investigations and interviews with suspects and other employees who may have important information, Gupta said. Keep a written record of how you preserved and secured evidence, such as documents or computer hard drives, in case it is needed later for prosecution.
"Not doing so may compromise the information and allow the defendant's attorneys to petition that it not be admissible in court," she said.
Marketing on social websites
Dear Karen: When sales and cash flow are slow, how can we keep marketing and explore new targets for our services?
Answer: Establishing a presence for your company on social media websites will provide low-cost marketing opportunities that allow you to showcase your expertise and leverage existing relationships for introductions to new clients.
"If you're a tax consultant, you should be answering all the tax-related questions that people in your area are posting," said Patrick Crane, vice president of marketing at Mountain View, Calif.-based LinkedIn. "A clothing boutique should create a Facebook fan page that encourages customers to tag the boutique in photos that feature clothing from the store, and then enter them into contests for future discounts."
After you get onboard with social media, start groups for other small companies in your industry or region and provide helpful advice and tips in those groups, Crane said.
"You will give a little, but you'll get a lot" from the time you spend networking and establishing your expertise online, he said.
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