When unpredictable swings in the economy occur that have a negative effect on your business, there are a number of ways you can productively respond.
Factoring can alleviate cash flow problems by selling outstanding invoices to a third party at a discount in return for immediate cash flow. Factoring also frees up time spent on tracking and collecting invoice payments from customers.
Outsourcing responsibilities like payroll, human resources, tax and retirement plan management can save owners a substantial amount of money, time and reduce liability. By replacing in-house employees with outside vendors, owners also reduce employee related expenses including payroll taxes, benefit costs and supervisory demands.
Alternative Funding. Banks aren’t the only game in town. For instance, retail businesses can allocate a future portion of credit card sales to receive immediate working capital. Additionally, many state and regional economic development organizations provide specialized sources of financing, particularly for businesses that may represent new jobs or other community benefits. Microloans, those under $35,000, can be a great source for funding short-term financial needs.
Telecommute. Cut back on office space, gas and energy costs by enabling your employees to work from home. There are many affordable technologies (LINK = ADD to SMEToolKit /ch_citrix.html) today that enable small businesses to support remote workers.
Negotiate. In tough economic times, vendors are often willing to work with long term, loyal customers. If you can pay early, ask for a discount. If you can’t pay on time, ask for an extension to stretch out cash flow. You have nothing to lose and everything to gain by asking.
Alternative Shopping. Shop alternative venues such as bankruptcy auctions, hotel liquidators and government auctions for potentially significant savings on staple items such as furniture, fixtures, office supplies and equipment.
Lean and Mean Workforce. Reassess who does what and why to identify ways where you might refine workflow and eliminate inefficiencies. Also, consider decreasing hours of operation to reduce part-time employees’ payroll expenses.
Debt Restructuring. When negative economic conditions persist to the point where you find that you’re having trouble paying your bills, there is an innovative debt restructuring service that may help to avoid business bankruptcy by satisfying creditors based on what you can afford rather than unrealistic collection demands.
For additional ideas, SMEToolkit.org provides free access to a network of targeted small business assistance programs, resources and most importantly, people in local communities across America that are available specifically to help you. Run your business, don’t let it run you.
SME Small Business Learning Series
b) Human Resources
c) Tax Management
3. Alternative Funding
4. Converting future credit card sales to immediate working capital
5. Telecommuting technologies (LINK = ADD to SMEToolKit /ch_citrix.html)
6. Debt restructuring services