Over the Canadian Thanksgiving weekend the Canadian dollar shot up against the U.S. one to near-parity. Not surprisingly Canadian shoppers are flocking to the U.S. for better deals.

Small businesses are particularly vulnerable to market fluctuations, such as changes in the exchange rate, because they have smaller resources (e.g. cash reserve and sales margins) to cope with it. For example, a large corporation  may be able to temporarily slash their price, even at a loss, to keep their customers from dashing to the U.S. However, few small businesses are in a position to do so.

What can small business owners do in tough times like this?

As a lawyer who represents small businesses, I suggest the following:

• Rather than focusing on gloom and doom, small business owners ought to take this opportunity to examine their business model. Perhaps there’s room for improvement in terms of productivity or cost saving.

• If there’s enough cash reserve in the business, perhaps it’s a good opportunity to  expand while the cost is low. Expanding doesn’t necessarily mean opening new stores; it could mean recruiting young talent for future years or gaining market share from rival firms.

• Beyond the two measures above, tough times may be an opportunity to re-negotiate expensive leases and employment contracts. For example, car makers in the U.S. have recently obtained union’s concessions to accept lower wages. If a major contract is coming up for renewal, perhaps it’s worthwhile to have it re-negotiated.

PSWLaw offers Integrated Small Business Solutions™ tailored to your small business’ needs.