Small businesses have been greatly impacted by the recession over the last few years.  Yes, I know people despise the word recession, although it’s been part of our economic reality, officially, since December 2007.  Despite banks not lending, decreased revenues and people lacking the purchasing power of yesteryear, many small businesses have adapted in ways that not only make them more efficient, but also make them better leaders.

For example, social media marketing, including blogs, Facebook and LinkedIn, doesn’t require a large investment.  As such, small businesses are increasingly adopting social media as a means of adapting in a tough economic climate to generate new opportunities.  In fact, the Small Business Success Index (SBSI), a study released this year by the University of Maryland’s Smith School of Business in association with Network Solutions, indicates that 24 percent of small businesses have adopted social media in 2010 vs. 12 percent in 2009. The SBSI also indicates that 72 percent of small business owners have increased efficiency as a result of the recession.

According to the U.S. Small Business Outlook 2010 (SBO), conducted by Forbes Insights and CIT, many small business owners have learned significant lessons over the last few years.  They’ve become smarter about how to run their businesses, and tackling challenges has served to make them better leaders.

As one might imagine, about 63 percent of small business owners have reduced overhead and expenses to cope with lack of cash-flow.  About 71 percent claim they’re working harder and longer than prior to the recession.  Amazingly, almost half reported that they’ve developed new revenue streams, while 1-in-3 reported reducing staff and inefficiencies.

Differentiation

Another focal point according to the SBSI includes small business owners working hard to differentiate themselves from competitors.  About 80 percent plan to accomplish this via “superior customer service.”  About 76 percent plan to offer high-quality products and services; and 44 percent plan to lower prices.

Marketing and advertising

Small business owners who responded to the SBSI and the SBO say their focus is largely on marketing.  In fact, more than 60 percent plan to spend more money on marketing and advertising.  Print advertising remains the most popular among small business owners, followed by e-mail and social media marketing.  75 Percent of those surveyed plan to build a page on a social networking site, while almost 60 percent will network via sites such as LinkedIn.com.  About 40 percent intend to utilize a blog to generate new opportunities.

Twitter ranked last among respondents, with about 26 percent stating they will Tweet, and only 16 percent stating they will utilize Twitter as a “service channel.”

Although opinions vary as to when things will start improving, economically speaking, 43 percent of entrepreneurs who responded to the American Express OPEN “Economic Pulse,” believe the economy will improve by mid-year 2011.  Whether this is true or not, time will tell.  Though, along the way, small business owners will continue to adapt and change in ways that will optimally position them when the economy does rebound.