YOUR SALES ARE down. Your operating costs are out of control. Your cash flow has slowed to a trickle. Your bank wont give you a loan. Of course you blame the economy. Everyones suffering, so its no wonder your business is in trouble. Right?

Wrong.

Dont blame the economy. Recession or no recession, if your small business is failing, its your fault.

Sure, we all take hits in downturns. But if youre struggling, its because youve been doing something wrong all along. Take a good hard look under the hood and youll see that most of the problems in your small business are internal. But guess what? Thats good news. That means the situation is not beyond your control and can be fixed.

It wont be easy. My advice is controversial and uncompromising, but there is nothing I preach that I dont practice myself as a business owner. Here are five things:

Forget teamwork. Teamwork is overrated. It simply doesnt work in most small businesses. Insisting on teamwork is a fast route to lousy financial performance. Why? Because your team is only as strong as its weakest link. A single poor performer brings everybody down.

Employees crave strong leadership and structure, so focus on individual performance. Place set goals and demands on each head, one by one. Your employees have to know that at the end of the day, they answer to you, not to each other. And replace that tired clich There is no I in team with this thought: There is no $ in team--just mediocrity and excuses.

Micromanage like crazy. Dont delegate to the point of abdication. Delegating is just another word for shirking responsibility. Expect someone else to do it and 90 percent of the time it wont get done. In a small business, you dont have the time or money to correct someone elses mistakes.

Instead, you should wear the badge of control freak with pride. Sure, delegate tasks, but watch your employees like a hawk until you are satisfied they are doing what they are supposed to do; then keep watching. Insist on flash reports--one-sheeters that give you daily updates on the status of each flashpoint in your business. And never hand over the reins of your business to anyone, no matter how senior the employee.

Micromanage, micromanage some more, then circle back to make sure the task is getting done, and done right. You may have to put in a lot more time at the office, but youll ensure your business is making maximum profits.
Pay raises are over. Freeze your salaries now. Paying for performance is an absolute necessity for small and midsized businesses to achieve real profitability. Anywhere from 30 percent to 100 percent of an employees compensation should be based on performance, and that amount should be against the goals set for employees by the owner.

This applies especially to businesses with sales staff: sales people should have 100 percent of their compensation based on performance. Keep in mind that pay-for-performance doesnt just mean an employee gets paid more for doing well--this is not an entitlement. You have to be willing to set up a system and then also penalizes failure to perform.

Pay-for-performance is so important to the success of your business that if you dont establish it today, you should fire yourself.

Fear is the best motivator. Owning a small business isnt a popularity contest. You cannot be effective unless you are feared and respected by your employees. Your employees wont thank you for being tough on them, but theyll respect the dictator who keeps the business afloat and continues to cut them a paycheck. And fear of not getting a paycheck was, is and always will be the best motivator.

Fear shouldnt just motivate your employees. It should motivate you. Never get too comfy. A business owners internal fear of failure is what keeps the company alive.
Resist the bunker mentality--if you wait until the tide turns, you will drown. Instead, take action: cut costs, get aggressive about sales and fire mediocre workers. Continue to invest in areas of your business that will generate growth.

Dont play the victim. Do everything you can to take care of your business--work harder, faster and smarter than the competition by a factor of 10. As long as your business has a pulse, its in your power to turn things around.

If your business fails during a recession, its your fault. This bears repeating. Its not the economy, stupid, its you. Dont use the recession as an excuse. If youre not surviving its because you werent doing all that you should have during better times.

 George Cloutier is the author of Profits Arent Everything, Theyre the Only Thing: No-Nonsense Advice from the Ultimate Contrarian and Small Business Guru (HarperCollins, Sept. 2009). He is the founder and chairman of American Management Services, a management firm that specializes in turning around small and mid-sized businesses.