Tag Archive for "cashflow"
For many of us 2009 was a challenging year. Now is the time to focus on your accomplishments, rather than focus on what didn’t get done. Celebrate what you achieved.
Here are a few suggestions to get you started:
- Becoming more nimble and flexible in the way you do business as the economic environment worsened and then seemed to get stuck in a holding pattern. Along the way you learned a few things.
- Learning to do what you dislike. Be it calling customers to collect past-due amounts or tightening customer credit to protect cash flow. It wasn’t always easy but it was necessary. Your business is stronger for it.
- Re-focusing the business services back to core competencies even at the risk of disappointing certain customers. Overall operations will be more efficient and profitable.
- Parring expenses to what was needed to operate not what was desired. Yes the belt tightening was annoying but the cost of not surviving was even more annoying.
- Cross-training staff to both economize on labor and develop employees’ latent skills. Without realizing it you created a training program that will help you to grow in-house talent!
- Using down-time wisely to create new product and/or service offerings and to shore up systems and procedures. With the “luxury” of time you invested in your business future.
- Exploring the world of social media and determining what makes sense for your business and the customers you need to attract.
- Interacting live with your customers and listening to what they need from your business to be successful. You have enhanced the relationship.
- Asking for help. Perhaps you joined a CEO forum or formed an advisory board. The important point is you stopped trying to go it alone.
What else have you done that you can share with us? Leave a comment and let us know.
Wishing you a Merry Christmas!
During October the Small Business Administration announced:
- The launching of an on-line training program on Winning Federal Contracts-A Guide for Women Entrepreneurs.
- Proposals that would strengthen opportunities for disadvantaged small businesses to benefit from the 8(a) Business Development program. They have requested comments from small business owners on the proposal. You have until December 28, 2009 to submit your comments to www.regulations.gov.
These two opportunites come to you due to the Stimulus Act. You might want to take a look to see if you can benefit. Let us know what you decide.
The recent increase in M&A activity would suggest the credit markets are beginning to thaw at the highest levels. Hopefully this means the small business market will see activity in 2010 though exactly when remains the mystery. Being prepared to act is therefore important. It’s a good time to review where you and your business stand on what the lenders call the “5 C’s” which is how they evaluate the creditworthiness of a business.
- Character: What is your company’s credit history and how likely is it the loan will be repaid? If you know you will borrow you then need to know what you will use the funds for and how you will generate the funds to repay the loan at the appointed intervals.
- Capacity: Will the company generate sufficient cashflow to meet current and future repayment requirements? As part of the process of applying for the loan a detailed cashflow analysis should be prepared. Ongoing the cashflow analysis should be updated monthly at a minimum. You don’t need any surprise cash shortages surfacing.
- Collateral: Do you have non-business assets that can secure the loan? For the small business owner this often means putting up the family residence which can be a scary proposition. All the more reason to stay on top of cashflow.
- Capital: Do you and your business have sufficient net worth to justify this loan? It will be important to have current and personal financial statements available. Also asking if the lender has minimums is important before getting too far in to the process.
- Conditions: What outside factors, for instance the economic outlook and competition, could impact repaying the loan? Knowing what is happening in your market(s) is critical.
Lenders are also looking at how quickly you collect your accounts receivable and pay your accounts payable. The aging of accounts receivable and accounts payable needs to be updated weekly and examined periodically throughout the week.
Taking time now to get your business in credit shape will pay-off for when the thaw reaches the small business loan market.
