Hi,
This is an international problem.
We all need to take it as an opportunity.
Small businesses are an important part of the UK economy too and frequently lead the field in innovation.
Firstly, It has never been more important to share resources. This where local business clubs can make a difference. They all need to cut the wholesale competition mentality and instead learn to co-operate. Shared advertising is a great example. A small business probably can't afford a large newspaper ad or a cinema film, but a group can. A ingle hone number with a shared secretarial answering service cuts costs and as professionalism.
Business needs to be able to encompass new technology, again shared resourses. Get a web designer to do an upbeat website with multiple links. Many city business websites lack excitement and offer bland landing pages with dull text advert links.
A small business could offer a commission based scheme. "You bring me new guaranteed business and I will give you a finders fee on completion"
Even as non business people we could approach local business and ask them how we can help them to compete for your order. Example, they may not be able to supply tyres (sorry, USA tires?) for your motor as cheaply as the next big city BUT they might be able to collect and return your motor to your place of work. Ask!
Another example: Local gardening company working in a drought area might get together with a plumber and offer irrigation or just plain water storage systems. It works, I know.
Support local business. Tell them why they aren't competing and help them to do so.
Look for new opportunities in bad times. Here in the UK gold buying companies are heavily advertising for second-hand gold objects.I dare say it's the same in other countries?
It's a case of LISTENING to what people want and acting.
Good times will come again but they will be different.
Roger