Breaking Through the Stagnant Economy
When things were speeding along at a healthy rate, the eagle eye you kept on your business could afford a few wayward glances to enjoy the scenery, but now that we have hit a few speed bumps it becomes more important to take a careful look at your business and get both hands back on the steering wheel.
We have compiled a few bullet points of helpful hints for you to consider as you navigate the bumpy road ahead.
Business Tips for a Stagnant Economy
1) A/R and A/P: Have you wanted to tweak you’re A/R and A/P terms? This might be a good time to re-address any issues you have as collecting A/R more quickly and extending your A/P is a great way to manage your cash.
2) Inventory: Your inventory level is one area to pay close attention – there is no sense in having too much on hand right now! Consider switching to a “Just In Time” inventory management philosophy.
3) Client Diversification: To make sure your business is well diversified, make sure one client/customer is not more than 10% of your business revenue.
4) Miscellaneous Expenses: Think twice about that company retreat to Las Vegas. Can you achieve the same goals by doing something differently? (This goes for all extraneous expenses!)
5) Good Credit: Due to the credit crunch, it can be more difficult to obtain new financing. Make sure you have a good track record by having a good credit history, manage cash flows properly and think about delaying that large personal salary payment to keep your retained earnings adequate.
6) Bank References: Do you have a nice relationship with your bank? Trade references, solid financials and a bank that can recommend you are sometimes better than a good credit report.
This is the time where our 30 years of experience (that is at least 3 recessions!) will be most beneficial to you! If you would like our help, please do not hesitate to call us at (319) 339-4884 or e-mail Mike Mesch (mmesch@tld-inc.com).