Small and medium-sized businesses can take measures to survive the recession.

Every business should have a strategic plan for the use of its resources, according to Tim Schramko, president of Schramko & Associates LLC, a business consulting firm established in 2007 by him and his wife Deborah.

Joe Iacono of Sdudi has been working with Dan and Amy Miller from UglyData at the UT Incubator site.

“Without a well-developed and defined plan, management cannot make informed decisions about the use of manpower, capital and marketing or sales,” Schramko said.

He said development of strategic planning with an outside consultant familiar with the business or industry can lead to a more focused plan of action.

Outsourcing selected services like accounting, financial management, human resources, legal, sales and marketing can lower the direct cost of doing business. It can lead to having access to greater expertise by relying on specialists in those fields.

One local business is seeing more outsourcing of information technology services.

“We are seeing growth because companies are opting not to buy new servers, but to outsource and receive an overall cost-savings in the process,” said Amy Miller, president of Ugly Data Inc., which provides IT services to business clients.

The savings include overall cash outlay for new servers and not paying for an IT team to install and maintain the new servers. They also save on efficiencies and utilization because Ugly Data is on a virtualized system, Miller said.

“We’re seeing the same growth in our exchange hosting. Companies are not willing to pay for the software and IT costs to do it themselves when they can outsource a solution. It’s not eliminating the IT person, but it allows them to redirect their focus,” Miller said.

Some companies are also reevaluating their national providers and downsizing to local, more affordable options, she said.

Ugly Data is providing IT services for two startup companies operating from UT incubators — CeutiCare LLC, a medication therapy management firm, and Sdudi LLC, a developer of a platform operating system.

Sdudi packages the Sdudi Operating System on a USB 2.0 stick or thumb drive with open-source versions of popular software programs. Ugly Data supplies backup and storage for Sdudi documents and settings to protect against lost or misplaced drives, Miller said.

Smaller companies that do not need a full-time IT person are partnering with two or three other companies to share an IT support person. All pay into one account to fund for the IT person’s compensation and benefits.

Schramko is the newly appointed president and CEO of Ceuticare. No longer a full-time professor at UT, he serves as a consultant with the RGP helping new and existing businesses.

Another recession-proofing option is eliminating or downsizing office space by having employees work from home. It was one of the first things Hewlett Packard did to reduce office space when Miller and her husband Dan worked there in 1999.

“Amazingly, we worked more hours, but were happier employees,” Miller said.

The couple moved from the Chicago area to Toledo in 2007 to establish Ugly Data, which they operate from the Incubator for Clean and Alternative Energy on UT’s main campus.

Schramko recommends that businesses should review their space and equipment needs to determine if the space occupied is really needed. Downsizing space and equipment is another way of reducing operational costs.

If two or more firms have complementary products or services, they can jointly market to the same client base, too.

“Businesses should not panic or they may make poor decisions that will affect them during and after economic hardship,” said Henry C. “Chuck” Bohleke, chairman of business technologies and associate professor at Owens Community College.

The biggest expense for most businesses is salaries and benefits so many companies tend to get rid of employees, but it’s not always the best solution, Bohleke said.

“People are an essential asset to any business. Once a company loses valuable people, those people may not be available when business gets better as the economy improves, and it will eventually. Businesses need to prepare for when the recession ends.”

This entry was posted on Friday, February 13th, 2009 at 9:50 am and is filed under Entrepreneurs, Toledo Business Link.
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