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Recession Proof Your Business

By Ronelle Ingram  

Living in Southern California, I am wondering when the price of gas and the value of my home will reach parity.  Economic downturn, housing price collapse, inflation, oil company greed, wartime economy— call it what you want, the world’s financial system is tightening. Creative business people can still make a profit and grow their business.  The current world economy can be viewed as nothing more than a fiscal bump on your road to success.

The past few years of wartime prosperity have shown that the free flow of money allows businesses to be a little more lenient on adhering to excellent business practices.  Prompt collection of accounts payable may have become a little lax. New customers are extended instant credit. Delinquent accounts are allowed to stretch out from 60 to 90 days past due. Demo equipment has been allowed to stay a few extra weeks.

Many small business owners have been working in an atmosphere of employees having a great deal of power. Low unemployment rates have resulted in excessive wages, job-hopping, additional soft benefits, and a general sense of the employee being in charge. There is no longer a feeding frenzy for employees. 2008 is the year of job cuts, not hiring bonuses. How can both the employer and employee gain from the swinging of the economic pendulum?

From A Business Point Of View

Watch your receivables; many of your customers are having “cash flow” problems. A 90 day past due account may file for bankruptcy or close their doors before you are paid.

Always ask a past due customer if they will provide a credit card number to make their account current. Many customers will pay for a past due service agreement or even purchase new equipment with their plastic. If your company does not accept credit cards, apply to be a credit card merchant.

Small entrepreneurial companies must show a monthly profit to stay in business. A company or individual that does not pay their bills is not a customer. They are a thief. Why are you doing business with a known bandit? Think twice about doing business with known criminals. Your employees will stop coming to work if you do not pay them. Treat your non-paying customers similarly.

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