You may be in Mail Order, Direct Mail, or you may be a local merchant with 150 employees or more; whichever, however or whatever, you've got to know how to keep your business alive during economic recessions. Any time the cash flow in a business, large or small, starts to tighten up - the money management of that business has to be on the ball.
Some of the things you can do and should do, include protecting yourself from expenditures made on sudden impulse. We've all bought things or services we really didn't need, simply because we were in the mood, or perhaps due to the flamboyancy of the advertising, or even because of the persuasiveness of the sales person. Then we sort of "wake up" a couple of days later and find that we've committed business funds to hundreds of dollars for an item or service that's not really essential to the success of our own business.
If you're incorporated, you can eliminate these "impulse purchases" by including within your by-laws a clause that states: "all purchasing decisions over a certain amount are contingent upon approval by the board of directors." This will give you a chance to consider any "impulse purchases" a second time after you've had a chance to think about the need for your purchase.If you're business is a partnership, you can tell whoever it is that attempts to sell you something, that all purchase decisions are contingent upon the approval of a third party. In reality, the third party can be your partner, one of your department heads or even one of your suppliers.
If your business is a sole proprietorship, you don't have much to really worry about because as an individual you have three days to think about your purchase, and then to nullify that purchase if you think you really don't need it or can't afford it. Especially in times of emergency, be sure that you don't "short-change" yourself on professional services. Anytime you commit yourself and move full-speed ahead without fully investigating all the angles, and preparing yourself for all the contingencies that may arise, you're skating on thin ice. Regardless of the costs involved, it always pays off in the long run to seek out the advice or experienced professionals before embarking on a plan that could ruin you.
As an example, an experienced business consultant can fill you in on the 1244 stock or Sub-Chapter S advantages. A very simple process, but one with tremendous monetary benefits to businesses. The 1244 status encourages investors to put equity capital into your business because in the event of a loss, amounts tup to the entire sum of the investment can be written off in the current year. Without the "1244" classification, any losses would have to be spread over several years, and this of course, would severely lessen the attractiveness of your company's stock. Any business owner who has not filed as a 1244 corporation, has in effect, but himself off from 90-percent of his prospective investors.
Particularly when sales are down, you must be "hard-nosed" with people trying to sell youluxuries for your business. When your business is booming, you undoubtedly spend more time allowing different sales people to show you new models of equipment or a new line of better-looking supplies, but when your business is down, skip the entertaining frills and concentrate on the basics. Great care, however, must be taken to maintain courtesy and allow these sellers to consider you a "friend," and call back at another time.
Whoever maintains your company's books should reflect your way of thinking, and generate information according to your policies. Thus, you should hire an outside accountant or accounting firm to figure your return on your investment, as well as the turnover on your accounts receivable and your inventory. Such an audit or survey should focus in depth on any or every item within your financial statement that merits special attention. In this way, you'll probably uncover any potential financial problems before they arise.
Continue To MAKE YOUR BUSINESS SURVIVE # Part II
Some of the things you can do and should do, include protecting yourself from expenditures made on sudden impulse. We've all bought things or services we really didn't need, simply because we were in the mood, or perhaps due to the flamboyancy of the advertising, or even because of the persuasiveness of the sales person. Then we sort of "wake up" a couple of days later and find that we've committed business funds to hundreds of dollars for an item or service that's not really essential to the success of our own business.
If you're incorporated, you can eliminate these "impulse purchases" by including within your by-laws a clause that states: "all purchasing decisions over a certain amount are contingent upon approval by the board of directors." This will give you a chance to consider any "impulse purchases" a second time after you've had a chance to think about the need for your purchase.If you're business is a partnership, you can tell whoever it is that attempts to sell you something, that all purchase decisions are contingent upon the approval of a third party. In reality, the third party can be your partner, one of your department heads or even one of your suppliers.
If your business is a sole proprietorship, you don't have much to really worry about because as an individual you have three days to think about your purchase, and then to nullify that purchase if you think you really don't need it or can't afford it. Especially in times of emergency, be sure that you don't "short-change" yourself on professional services. Anytime you commit yourself and move full-speed ahead without fully investigating all the angles, and preparing yourself for all the contingencies that may arise, you're skating on thin ice. Regardless of the costs involved, it always pays off in the long run to seek out the advice or experienced professionals before embarking on a plan that could ruin you.
As an example, an experienced business consultant can fill you in on the 1244 stock or Sub-Chapter S advantages. A very simple process, but one with tremendous monetary benefits to businesses. The 1244 status encourages investors to put equity capital into your business because in the event of a loss, amounts tup to the entire sum of the investment can be written off in the current year. Without the "1244" classification, any losses would have to be spread over several years, and this of course, would severely lessen the attractiveness of your company's stock. Any business owner who has not filed as a 1244 corporation, has in effect, but himself off from 90-percent of his prospective investors.
Particularly when sales are down, you must be "hard-nosed" with people trying to sell youluxuries for your business. When your business is booming, you undoubtedly spend more time allowing different sales people to show you new models of equipment or a new line of better-looking supplies, but when your business is down, skip the entertaining frills and concentrate on the basics. Great care, however, must be taken to maintain courtesy and allow these sellers to consider you a "friend," and call back at another time.
Whoever maintains your company's books should reflect your way of thinking, and generate information according to your policies. Thus, you should hire an outside accountant or accounting firm to figure your return on your investment, as well as the turnover on your accounts receivable and your inventory. Such an audit or survey should focus in depth on any or every item within your financial statement that merits special attention. In this way, you'll probably uncover any potential financial problems before they arise.
Continue To MAKE YOUR BUSINESS SURVIVE # Part II
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