Survival Tips For Small Businesses

You may be in Mail Order, Direct Mail, or you may be a local merchant with 150 employees; whichever, however or whatever---you've got to know how to keep your business alive during economic recessions. Anytime the cash flow in a business, large or small, starts to tighten up, the money management of that business has to be run as a "tight ship."

Some of the things you can and should do include protecting yourself from expenditures made on sudden impulse. We've all bought merchandise or services we really didn't need simply because we were in the mood, or perhaps in response to the flamboyancy of the advertising or the persuasiveness of the salesperson. Then we sort of "wake up" a couple of days later and find that we've committed hundreds of dollars of business funds for an item or service that's not essential to the success of our own business, when really pressing items had been waiting for those dollars.

If you are incorporated, you can eliminate these "impulse purchases" by including in your by-laws a clause that states: "All purchasing decisions over (a certain amount) are contingent upon approval by the board of directors." This will force you to consider any "impulse purchases" of considerable cost, and may even be a reminder in the case of smaller purchases.

If your business is a partnership, you can state, when faced with a buying decision, that all purchases are contingent upon the approval of a third party. In reality, the third party can be your partner, one of your department heads, or even one of your suppliers.

If your business is a sole proprietorship, you don't have much to worry about really, because as an individual you have three days to think about your purchase, and then to nullify that purchase if you think you don't really need it or can't afford it.

While you may think you cannot afford it, be sure that you don't "short-change" yourself on professional services. This would apply especially during a time of emergency. Anytime you commit yourself and move ahead without completely investigating all the angles, and preparing yourself for all the contingencies that may arise, you're skating on thin ice. Regardless of the costs involved, it always pays off in the long run to seek out the advice of experienced professionals before embarking on a plan that could ruin you.

As an example, an experienced business consultant can fill you in on the 1244 stock advantages. Getting eligibility for the 1244 stock category is a very simple process, but one with tremendous benefits to your business.

The 1244 stock encourages investors to put equity capital into your business because in the event of a loss, amounts up to the entire sum of the investment can be written off in the current year. Without the "1244" classification, any losses would have to be spread over several years, and this, of course, would greatly lessen the attractiveness of your company's stock. Any business owner who has not filed the 1244 corporation has in effect cut himself off from 90 percent of his prospective investors.

Particularly when sales are down, you must be "hard-nosed" with people trying to sell you luxuries for your business. When business is booming, you undoubtedly will allow sales people to show you new models of equipment or a new line of supplies; but when your business is down, skip the entertaining frills and concentrate on the basics. Great care must be taken however, to maintain courtesy and allow these sellers to consider you a friend and call back at another time.

Your company's books should reflect your way of thinking, and whoever maintains them should generate information according to your policies. Thus, you should hire an outside accountant or accounting firm to figure your return on your investment, as well as the turnover on your accounts receivable and inventory. Such an audit or survey should focus in depth on any or every item within the financial statement that merits special attention. in this way, you'll probably uncover any potential financial problems before they become readily apparent, and certainly before they could get out of hand.

Many small companies set up advisory boards of outside professional people. These are sometimes known as power Circles, and once in place, the business always benefits, especially in times of short operating capital. Such an advisory board or power circle should include an attorney, a certified public accountant, civic club leaders, owners or managers of businesses similar to yours, and retired executives. Setting up such an advisory board of directors is really quite easy, because most people you ask will be honored to serve.

Once your board is set up, you should meet once a month and present material for review. Each meeting should be a discussion of your business problems and an input from your advisors relative to possible solutions. These members of your board od advisors should offer you advice as well as alternatives, and provide you with objectivity. No formal decisions need to be made either at your board meeting, or as a result of them, but you should be able to gain a great deal from the suggestions you hear.

You will find that most of your customers have the money to pay at least some of what they owe you immediately. To keep them current, and the number of accounts receivable in your files to a minimum, you should call them on the phone and ask for some kind of explanation why they're falling behind. if you develop such a habit as part of your operating procedure, you'll find your invoices will magically be drawn to the front of their piles of bills to pay. While maintaining a courteous attitude, don't hesitant, or too much of a "nice guy" when it comes to collecting money.

Something else that's a very good business practice, but which few business owners do is to methodically build a credit rating with their local banks. Particularly when you have a good cash flow, you should borrow $100 to $1,000 from your banks every 90 days or so. Simply borrow the money, and place it in an interest bearing account, and then pay it all back at least a month or so before it's due. By doing this, you will increase the borrowing power of your signature, and strengthen your ability to obtain needed financing on short notice. This is a kind of business leverage that will be of great value to you if or whenever your cash position becomes less favorable.

By all means, join your industry's local and national trade associations. Most of these organizations have a wealth of information available on everything from details on your competitors to average industry sales figures, new products, services, and trends.

If you are given a membership certificate or wall plaque, you should display these conspicuously on your office wall. Customers like to see such "seals of approval" and feel additional confidence in your business when they see them.

Still another thing often overlooked: If at all possible, you should have your spouse work in the business with you for at least three or four weeks per year. The important thing is that if for any reason you are not available to run the business, your spouse will be familiar with certain people and situations about your business. These people should include your attorney, accountant, any consultants or advisors, creditors and your major suppliers. The long-term advantages of having your spouse work four weeks per year in your business with you will greatly outweigh the short-term inconvenience. Many couples share responsibility and time entirely, which is in most cases even more desirable.

Whenever you can, and as often as you need it, take advantage of whatever free business counseling is available. The Small Business Administration published many excellent booklets, checklist and brochures on quite a large variety of businesses. these publications are available through the U.S.Government printing office. Most local universities, and many private organizations hold seminars at minimal cost, and often without charge. You should also take advantage of the services offered by your bank and local library.

The important thing about running a small business is to know the direction in which you're heading; to know on a day-to-day basis your progress in that very direction; to be aware of what your competitors are doing and to practice good money management at all times. All this will prepare you to recognize potential problems before they arise.

In order to survive with a small business, regardless of the economic climate, it is essential to surround yourself with smart people, and practice sound business management at all times.

Dominic Ferrara - Owner of Small Business Marketing Secrets. Do you need help for your business? We can help at http://www.small-business-marketing-info.com

scheduled cleaning services Winnetka ..

---

Cabinet Refacing Business Opportunities

With all the cabinet refacing business opportunities out there, you... Read More

6 Ways Small Businesses Can Survive In A Crazy Economy

Contrary to popular belief, small businesses can survive a crazy... Read More

How To Write A Business Plan

Writing a business plan is a fundamental step to ensuring... Read More

The Business Failed, But Did You?

Q: After years of dreaming about starting my own business,... Read More

How Your Habits Control Your Small Business Success

Habit: A consistent behavior you perform so frequently that it... Read More

Financial Fundamentals - What Every Small Business Owner Should Know!

Business owners rarely go into business to deal with the... Read More

So What? How to Elicit Benefits from Features

"So what?" is a lovely question.It can lead to a... Read More

Small Business Ideas - Your Image Can Lose You Business

What image do you and your people portray to your... Read More

Reclaim Equipment Detailing Industry and NPDES, EPA, Storm Water Rules

It behooves every professional mobile auto detailer to stay up... Read More

Setting Up as an Electronic Repair Authorized Service Center

If you plan to upgrade your workshop into an Authorized... Read More

Secrets of Cleaning Truck Trailers in Your Fleet from a Veteran Truck Washer

Cleaning the trailers towed by big trucks is not easy,... Read More

Shopping For a Franchise

Shopping for a franchise is easy if you know what... Read More

Starting A Concrete Cleaning Pressure Washer Business

Concrete cleaning can be a lucrative business to start. Here... Read More

Covenants Not To Compete: Another Franchise Quandary

Imagine that you have operated a successful franchise business for... Read More

Business Checks are an Added Cost to Your Small Business - Try Making Them Yourself!

Starting and managing a small business is no fun chore,... Read More

City Wide Garage Sales: Hidden Riches!

Most of us remember going to at least one garage... Read More

Why Small Businesses Need Both A Logo And An Identity System

Experts urge small business owners to "brand" their business ?... Read More

Detailing Business Options

So you want to get into the auto detailing business... Read More

Window Cleaning Business Start Up

Should you buy a business opportunity or Franchise if you... Read More

Definition of Security: Small Business Owner

Yes, that IS security when nobody can downsize you because... Read More

Do You Microbifer in Your Cleaning Business?

Microfiber cleaning towels have been around for about ten years... Read More

Administration Of Your Small Business

You've been meaning to tend to the administration part of... Read More

Alliances: Drawing The Line

How far can you go based on your relationship with... Read More

Is Brick and Mortar A Passing Fad?

Q: Is the online world the best place to sell... Read More

Postcard Marketing ? Low Cost Visibility

You need to be visible to attract customers, right? But... Read More

reliable maid service Lincolnshire ..