Tag Archive for 'accounts receivable'

Ten Small Business survival steps to take right now

Last week we talked about assuming a survival attitude. Here are 10 things to do right now to execute on this attitude.

1. Profit is the Queen of business, but cash is King. Ask employees to help cut waste and expenses, plus review operational steps and eliminate or tighten up inefficient ones. What’s their motivation? How about job security? Watch the pennies, and the dollars will take care of themselves.

2. Stay close to accounts receivables and cash management. Many tasks can and should be delegated by a business owner, but right now cash management isn’t one of them.

3. Declare war on excess inventory. Don’t miss a sale, but don’t let one piece of inventory spend the night in your building unless it’s absolutely essential. Inventory is cash you can’t spend until you convert it back by making a sale.

4. Review ALL contracts for services to make sure you still need them. Your customers are doing the same thing; get ready.

5. Make your banker your survival partner in 2009. Keep him or her informed about how things are going, good or bad – especially the bad. Bankers need information, even if it’s bad news. Remember this: An uninformed banker is a scared banker, and no one ever got any help out of a scared banker.

6. Wherever possible renegotiate term loans, including real estate mortgages, to take advantage of lower interest rates. Longer amortization and lower rates preserve cash.

7. If you rent, talk with your landlord about adjustments in the terms of your lease. Don’t expect the landlord to take a major hit, but he or she knows that prospects may not line up to take your space if you leave. This is a good time to be creative.

8. Convert non-performing assets to cash – even if you have to sell for less than you want. What things were worth last year has no bearing on what they’re worth today, and they might be worth less tomorrow. If it’s not performing, cut it loose.

9. If it’s humanly possible, personally call on EVERY customer at least once in the near future, even if a salesperson is calling on them. This isn’t a sales call; it’s a relationship call. Find out what you can do to help them, and then do it. Your company’s future probably depends upon these visits.

10. Payroll expenses must be addressed. Non-performers must go first. Before making other cuts, ask your team to help find creative ways to allocate your bare-bones payroll budget. But don’t forget that now could be a good time to invest in the future by acquiring a highly trained “big business” employee who just got laid off.

Don’t wait - take these 2009 survival steps right now.

Recently, on my small business radio program, The Small Business Advocate Show, I discussed these 10 survival steps in more detail. You can listen to my thoughts by clicking on this link. And as always, I look forward to your comments.

The Small Business Survival Song: Cash is KING!

You know how you will hear a song that you absolutely can’t stand – on the radio or someone whistling it? And for the rest of the day you can’t stop it from playing, over and over and over again in your head. It’s maddening, right?

Well, there is a song that I want to introduce you to which I call the “Small Business Survival Song.” I don’t care what melody you put under it, but for the foreseeable future, here are the lyrics that MUST by constantly playing in your head: Cash is KING!

These words are actually the second part of this short song, which goes like this: “Profit is the Queen of business, but Cash is KING!” But right now, and for some time to come, profit is not your prime motivator – your prime motivation is CASH!

For at least the next 12 months, you must live, eat, breathe, sleep and dream these most fundamental of all entrepreneurial survival lyrics: Cash is KING!

When you’re spending money on anything – and I mean ANYTHING: Cash is KING!

When you’re considering a new contract or renewing an old one: Cash is KING!

When you’re making a sale on terms, regardless of who the customer is: Cash is KING!

This week I interviewed two outstanding cash flow management experts on my small business radio program, The Small Business Advocate Show. The first one was Tom Markel- founder, chairman and CEO of ibank.com- who’s especially knowledgeable about cash and credit. The second interview was with Phil Holland, founder of My Own Business, Inc., who is an expert on small business start-up and growth strategies.

Both of these members of my Brain Trust offered several outstanding tips and best practices when it comes to that song I’m trying my best to get stuck in your head: Cash is KING! Invest a few minutes to learn what just might be the difference between surviving and, well, you know. And be sure to leave a comment, if you want.

Tom Markel’s interview: Phil Holland’s interview

By the way, did I mention that Cash is King?

Small business and the cash squeeze

If you’re a small business owner, these days you’re probably dealing with cash flow issues. Even if your customer base and revenue levels haven’t dropped much, there is a good chance that accounts receivables have slowed. I heard someone say that, for many customers, 60-days is now the new 30. This was funnier when we were talking about pink being the new black.

So, what are you doing about your cash flow? Here are three quick tips:

Customers who see you more often tend to put you on the list of “pay first” when they get money. For the next several months, maybe quarters, spend more time in front of customers whenever possible, even if you have someone else who calls on them regularly.

Make sure salespeople aren’t making sales to people who might not be able to pay you on time. Major companies are among the notorious for taking 90 days to pay; so if you sell to this level of customers, be sure you build that into your pricing and cash flow model.

Stay close to your banker. If you don’t have a close banking relationship, make one this week. Even if you don’t need them, do it anyway. Take them to lunch and tell them how things are going, even if the news isn’t good. Remember, an uninformed banker is a scared banker; and no one ever got any help out of a scared banker.

Someone who knows about cash flow issues is Jerry Silberman, Brain Trust member, corporate workout expert and CEO of Corporate Turnaround. I talked with Jerry on my show today; and he offered his own spin on cash flow, collections, accounts receivables, accounts payables, and even what to do if you get in a real bind. Take a few minutes to listen and leave a thought or a question for me and others.

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