May 27, 2009

Don't Stop Innovating to Save Money

When a downturn hits and small businesses have to cut costs to survive, many small businesses trim everything but their core competencies. They cut all research and development and put the brakes on the very projects that they were started to diversify the company's revenue streams and grow it in ways to help it survive. Here's a blog post from HarvardBusiness.org by Freek Vermeulen, asserting that companies are better off exploring new sources of income and experimenting with innovative ideas, two ideas we talk about in our new book on saving your business. One idea we suggested is to reap the benefits of an employee brainstorm by asking employees to write a "5/15" report -- a report with employees' suggestions for improving the bottom line, that takes no more than 15 minutes to write and 5 minutes to read. Another idea that Freek talks about is to look for innovative ideas in the ways people have changed their shopping habits to save money (for example, resurfacing kitchen cabinets instead of buying new ones).

To learn more about helping your business survive the challenges of recession, see Save Your Small Business, by Ralph Warner and Bethany Laurence (Nolo).