Featured Post

30 Do’s And 20 Don’ts In Starting A Small Business

Small scale businesses are easier to set up compared to the middle or large scale businesses that require more time, feasibility reports, ad...

Wednesday, October 22, 2008

How Can Your Small Business Survive Today's Economic Crisis??

You need immediate relief, and no one is talking about the elephant in the room: CASH.

So, to address the immediate actions you can do right now are:

1) Stop using credit for anything. There's a reason the saying is CASH is king. Pay cash for everything right now, and avoid credit like the plague.

2) Have an honest conversation with your employees. Freeze their salaries for the next year. It is a sacrifice for them, but it keeps their jobs, and once things smooth out, you can look at ways to reward their sacrifice and loyalty.

3) Don't just control costs; aggressively do so. Every paperclip you can re-use, do it. Every ream of paper, every pen ... office supplies are one of the largest areas of shrinkage. Lock up the supply closet.

4) Go to your suppliers, tell them you intend to pay cash for your goods, and negotiate a discount on the products in return. It's time to return to the days of 2%/10, n/30. Suppliers are also so strapped for cash they will work with you.

5) As you expand your services, be careful not to expand your operating budget at the same time. Carefully weigh the opportunity costs if you see it will require an investment to offer a new service.

6) Continue to save. Every check, even if it's only $5, save it. Encourage your employees to do the same. This is about keeping cash.

7) Move some of your investments to CD's. If you need an amount of money, you can get to it, and it still earns interest in the meantime.

(Disclaimer: This is my personal opinion and not professional advice.)

No comments: