SMBs should look inward to survive recession

In such a difficult economy, it is tempting to blame economic conditions such as the credit crunch or the lack of consumer spending as major culprits in the increasing number of small business failures.

While these indicators have no doubt been a huge factor in the difficulties of small businesses, New York Times small business columnist Jay Goltz suggested that the problem may be more internal than external, as "many small companies are going out of business needlessly because they do not know what they do not know."

Instead of blaming the credit crunch for making small business loans scarce, small business owners' real problem may be their pricing formulas, Goltz said. Instead of blaming a lack of sales, they may need to be focusing on better - or better trained - sales people. Rather than blaming the fierce competition, they may not be running their business efficiently, he wrote.

The solution, Goltz proposed, may be "providing training in accounting, pricing, management and marketing" for small businesses.

"If small business is really the backbone of the American economy, this should be a top priority," he wrote.

Although recent data cited by the New York Times found that the amount of private sector workers employed by small and midsize businesses has decreased 4.3 percent from 1988 to 2006, the latest survey from the National Small Business Association found that small businesses projected improvements in employment levels for the coming 12 months.