When you have been reading the paper, watching the news or listening to the radio recently, you’re probably familiar with the news concerning the President and Congressional leaders trying to reduce our huge federal deficit by as much as $4 trillion over 10 years and raise the debt ceiling by August 2nd so we don’t default on our debt payments.
I have numerous opinions on both our careless investing and borrowing practices, none of that are positive, however , there are two lessons I want to share with you today relating to this news.
The first lesson is about how this may affect your small business. According to the Wall Street Journal nowadays, as part of the compromise to cut spending, substantial reductions in tax breaks and deductions for businesses are likely. Which means less tax breaks for your small company.
Is this surprising? Not in the least. Every time the government needs money, they come running to the small business person with their give away. We’ve seen higher state fees, more fees, more licenses and permits required, and more regulations to carry out operating a small business.
So the first session is you need to realize that in order to be successful, you need to be self-sufficient. That is, you need to depend on yourself to find the solutions to create a flourishing business. The government certainly is not helping you by creating all of these hurdles that make it difficult to operate.
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And our financial system certainly isn’t helping by causing it nearly impossible to secure a small business mortgage, which would surely help many companies with their cash flow problems.
And that provides me to lesson #2, how to create your own cash flow.
Cash flow is a huge challenge for small businesses in today’s economic system. So here are a few tips to help you become more self-sufficient, increase your cash flow and hopefully make it easier to operate your company.
1 ) First, and you’ll continue to hear me harp on this; make sure your books plus records are always up to date and precise. This is something you can control and people things that can be controlled should be managed 100% of the time.
2 . Create a budget, follow it and update it regularly. Then compare your budget, at least monthly, to your actual records.
3. In case you extend terms to your customers, ensure they pay you timely. When the terms are net 30 days, on day 31, kindly remind them that their payment is due. Companies that are efficient with accounts receivable calls are usually the first ones compensated. Also, if necessary, consider offering earlier payment discounts. For example , a 2% discount if the bill is paid within 10 days.
4. Establish terms with your suppliers. This is one kind of credit, which still exists to get small businesses. This applies not only in order to suppliers of raw materials and items, but also to office supplies and other administrative expenses.
5. Be very selective with advertising and marketing costs. I suggest staying away from traditional advertising and concentrate more on face to face networking and getting associated with charitable and local networking institutions. Track each lead so you understand where your time is best spent.
6. Every time you leave the office, deal with every person you come in contact with as a possible client. This could be at the grocery store, at a ballgame, or a child’s event. The more individuals you meet and speak with, the greater opportunities you will create for a potential business opportunity. This type of marketing costs nothing; And
7. Think of ways to make what I refer to in my special 42 page report as the “most powerful revenue generator known to small businesses, repeating or continuity revenue. Try and create products or services that your clients can use regularly. Once you create this stream, you create a continuous cash flow.
Always remember you have all the tools you need to create whatever you want in life. You have the ability to end up being self-sufficient and create a thriving company. So continue to work hard and learn just as much as you can from the experts around you that have obtained the success you desire
Mark Luterman is considered by his colleagues and many businesses around the country to become one of the most UNIQUE entrepreneurs in the industry. His distinctive methods, and techniques develop millions of dollars of profits for himself and for the selected companies he or she chooses to advise.