Gloria Birnkrant: Money Tips

Gloria BirnkrantHere are eight tips for minimizing the effect of a recession on a small business…

By Gloria Birnkrant
Partner, NSBN

1. Clean up your act now, before you start feeling the pinch. Be sure you are getting current and good financial information on how your business is doing. Waiting till the end of the year to see how you did will not do it. You need to know, as up to date as possible, how you are doing, month by month.

2. Take a look at your expenses and see where you may be able to cut costs, without cutting service to clients/customers. Clients/customers are hard to get and if lost, almost impossible to get back.

3. Secure your credit now. Credit is already very tight and will probably get tighter. Talk to your banker, meet with them, and be sure you have established a good, honest, open relationship. Might be time to take a look at borrowing needs in the near future and secure that cash from the bank now, before you need it, not when you “desperately” need it.

4. Be prepared to re-invent yourself and your business. Recession create different needs. Some items that customers bought without thinking about it, may change to the “luxury” category with the tightening caused by the cost of food and fuel. New opportunities may present themselves, so be prepared to take advantage.

5. Ask others in your own line of business what they are feeling about your particular market. Believe it or not, people do like to help. Ask for advice, people are willing to give it.

6. Keep abreast of tax law changes as they come up. May not be too much happening for the rest of the year with the elections in process, but still bills are being passed that can affect your business. If you don’t or can’t keep up yourself, make sure you have a CPA doing that for you.

7. Solidify your customer base. Ask your customers what you can do to help their businesses during this down-turn period. They will remember the help you have offered, even when times get better. Be prepared to work with your customers. You may start seeing collection periods lengthen. Make calls; see if there are problems and what you can do to help.

8. Difficulties will come up; American Express is now asking their larger merchant users to provide “Reviewed” or “Audited” financial statements. You may have only put together records to get income tax returns prepared and find yourself facing a very expensive audit or review in order to keep your ability to accept customers” credit cards. This has just happened to one of my own clients.

Posted at July 18, 2008
Filed Under BSG [CPA TRENDLINES] |

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