SURVIVAL TIPS FOR ALL KINDS OF SMALL BUSINESSES
You may be in Mail Order, Direct Mail, or you
may be a local employer 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
including 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
flamboyance 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 that money.
On the other hand, 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.
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 a lawyer, an 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 honoured to serve.
Once your board is set up, you should meet
once a month.
Each meeting should be a discussion of your
business problems and an input from your
advisers relative to possible solutions.
These members of your board of advisers
should offer you advice as well as
alternatives, and provide you with
objectivity.
No formal decisions need to be made either
at your board meetings, 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 be 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 $200 to $2,000 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 organisations 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 your
business, your spouse will be familiar with
certain people and situations about your
business.
These people should include your lawyer,
accountant, any consultants or advisers,
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
counselling is available. The Small Business
Advisory Service, at the DTI, publish many
excellent booklets, check-lists and
brochures on quite a large
variety of businesses.
Many private organisations 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 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 recognise
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.
