BIZ SPOTLIGHT – BANKING / FINANCEBIZ SPOTLIGHT – BANKING / FINANCE
While no businessÂbig or smallÂis immune to the financial pressures wrought by a soft economy, here are some tips from professionals on how to survive a downturn.
Plan, Plan, Plan Prepare for adversity. Focus on the most essential notions of running a business: cash flow, accounts receivable, costs and debt.
Pay Your Debts Even
Earlier Make more than minimum payments. As interest rates rise, making only minimum payment will not reduce your debt.
Build Up Cash on Hand Having ample cash on hand is essential, even it means taking less money out for personal expenses.
Refinance Doing so can allow you to improve your overall operation.
Manage a Tight Cash Flow Diversify or add to your product line or service base so you can spread your cash flow out over the entire calendar year.
Evaluate Your Attractiveness to Financial Institutions You may have an advantage if your business is among the hot new markets. Unique funding may be available to you.
Make Fast Collections Get the money you are owed as quickly as you can.
Keep Little to No Money in Your Bank Account Surplus cash left sitting in a bank account could be making money somewhere else.
Capital Spending Make wise capital-spending decisions. Choose essential items that can help increase business.
Sources: Wells Fargo Small Business Roundup Newsletter, April 2006, and BusinessWeek, April 28, 1997