This week, I received a number of calls from friends and family about the incredible events in the financial markets. I've tried to be optimistic, but it wasn't easy. Every day, there seemed to be a new avalanche of bad news.
So what does this all mean for your business?
Well, I think it's critically important to be careful and conservative. Basically, assume the following:
- It's going to take longer to raise capital -- and the terms will be tougher.
- It's going to take longer to get customers.
- Oh, and customers will take longer to pay you (and that's assuming they actually do pay you).
In other words, you need to find ways to manage your cash flow. You can use some nifty online tools, such as NetBooks. There are also some great books on the topic, like Tim Berry's The Plan-As-You-Go Business Plan.
And another thing: Be sure to focus on your existing customers. In tough times, it can be easy to lose them. And, of course, it's always expensive to get new customers.
But there is a balance. "Make sure the customers are making efforts to pay in a reasonable time," said Ridgely Evers, who is the founder of NetBooks. After all, it can be costly to finance your customers' spending habits.
At times, it may be tempting to delay paying your own bills. However, this can result in bad relations with your vendors and may even hurt your company's credit.
Finally, I would try to raise some capital. This will certainly be tough, but you can make the case that there will be lots of growth when the economy gets back on track. With a decent amount of capital, you can snag qualified employees and invest in R&D. You may even be able to buy an ailing competitor at a great price.
It's scary stuff. But often it's times like these when opportunities are the most compelling.











Reader Comments (Page 1 of 1)
9-22-2008 @ 12:02AM
InvestmentPlayground said...
He with the most cash is always in the best position to weather storms. Everything is cyclical - as long as your business can withstand those three points you mentioned - and has enough cash to make do - you'll survive.
9-22-2008 @ 8:35AM
Ben said...
Anyone want to buy a boat in south MS/AL ?
9-22-2008 @ 8:52AM
MOSES M.BILITY said...
I THINK FOR THE GOVERNMENT TO HELP
THE BIG BANKS AND OTHER FINANACIAL
IS THE BEST WAY TO GO TO KEEP AMERICA ON TOP OF THE FINANCIAL
ACTIVITIES AROUND THE WORLD. HOWEVER, IT ALSO IMPERATIVE FOR
BIG BANKS LIKE BANK OF AMAERICA TO
HELP SMALL BUSINESS PERSON LIKE ME AND OTHERS WHO DESPERATELY NEED QUICK BUSINESS OPERATION CAPITALS.
THANKS
MOSES M.BILITY
PRESIDENT
THE BILITY TRANS-WORLD INC
9-22-2008 @ 10:23AM
Michael said...
The housing credit crisis began in the 90's under Clinton when Bill strongly advocated making it possible for every family to own a home. Pressure was applied to the large firms to bend and be flexible and to take a chance
so that everyone could buy a home. Clinton's people pushed through a
bill and with the good economy almost everyone voted for it,
including McCain. That was in 1998. Today, we are now seeing the tragic
results of such unwise thinking. Then, In 2005 McCain, much to his credit, recognized there were problems and cosponsosred a bill which stated that
there were problems, particularly within Fannie May and Freddic Mac, and that these financial irregularities needed to be changed before they could
drastically affect our entire economy in a negative way. When McCain's bill went before the Congress, it was quickly killed by the Democrats. Barney Frank and Chris Dodds led the opposition to McCain's bill and Obama voted
against it.
9-22-2008 @ 11:42AM
drew said...
wow you hit it on the head no one seams to pay the bill in a timely maner anymore good thing I got deep pockets ooops I forgot there empty
9-22-2008 @ 11:43AM
Dick said...
Here are the facts... The people that will decide who and what type of money is received are the same people that are heavily invested in the market.We are not a stupid public. I applaud the Dems for at least wanting some type of restraints on BusH, We have seen what he does with blank checks, our legal system and and all aspects of integrity.
9-22-2008 @ 11:45AM
ajgittner said...
I say good riddance to the Investment Banks period. They aren`t really banks anyways. They only create wealth for themselves by shuffling paper and advice. They are imaginary banks creating imaginary wealth helping Huge Corporations buy other huge corporations, of which they know nothing about their business, except how to cut jobs, service and quality. The only thing they produce is paper wealth and huge bonuses. I say" cut `em loose" and let their Ivy Leaguer MBA`ers find a real job with real world payscale.
9-22-2008 @ 12:01PM
centerforreform said...
Times are tough. Unless you are reading this on your yacht you should follow the advice of experts and start looking for other sources of income. You can sit around stewing about it or you can do something about by making a small investment in a home based service business. With that in mind, take a few minutes now and investigate the world’s simplest home based service business. You can find out about it at: Simple7StepBusinessPlan.com
9-22-2008 @ 12:05PM
P Boone said...
If you believe anything coming out of Washington, you are on very bad weed.
The average person is in the toilet & the best advise is to take what you can as fast as you can and never look back.
9-22-2008 @ 12:37PM
Russell said...
After steaming all weekend, trying to understand how all of this has come to be ( the bail outs ) the only final answer I could come up with was? The soccer moms even though they meant well. Every kid gets a thophy ! Should have considered the long term effects,in the real world it don't work.That would mean every man gets a Rolls,manson on the beach and a yacht.And they were getting close!
9-22-2008 @ 2:35PM
Len said...
It's not only the houseing loans but the credit cards and the banks with there high intrest and the way they went about giving out all that plastic so easily. With interest rates on these cards over 12% on most how is anyone going to pay back cards that are maxed out or almost to the limit. If they are going to do someting for the investment people how about the credit card holders?
9-22-2008 @ 2:55PM
harley said...
democrats are in a position to tank the economy and they will do anything to win a election they car nothing for the american people
9-22-2008 @ 3:58PM
ray said...
Cris Dodd said dems delaying the action wouldnt hurt the stock market...LOL look at it Dodd, wake up America the DEMS will do anything to win, this independent voter just moved to the right, i am tired of the democratic congress playing with the american peoples monies, they are worst than Bush and thats bad!!!
9-22-2008 @ 4:26PM
Azhot1 said...
2acres over from my house, still sits a house boarded up and two foreclosure notices taped to the doors. One year ago the illigal mexican couple left it. For another year 1/2 they lived there. He knew no english, he did not even work for the first 6 months they lived in it. She had a teaching degree from Mexico city and went close to the border for a job teaching 6th grade. Some in the neighborhood thinks that he was running mexicans. Then, there was crack downs on the border. The older couple ran out of steam. The little house has been empty ever since. These banks were horrible in those days. They loaned money to anyone. I withdrew my money over two yrs. ago From BOA when it became public knowledge that they indeed were lending to illigals. Another thing, I hate the Democrats in D.C. I hate ALL of them. Pelosi, H.Reid of Nev. Charlie Rangel, etc. I hate them. I hope they all rot in you know what. If the Dems get in the White House, I will stop stop spending like crazy. I've already tightened up and we will retire the business in December. The I.R.S will miss this small business. Adios' jerk-offs!
9-22-2008 @ 8:05PM
Rafael said...
Pardon me, can you hand me that
twenty dollar bill?...I need to
wipe my ass.....
9-22-2008 @ 8:27PM
Mike said...
I AM STILL TRYING TO FIGER OUT WHAT IS WORSE REDISTRIBUTION OF WELTH,
OR RESDISTRIBUTION OF DEBT?
I GUESS EITHER WAY THE REAL WORKING CLASS AKA 90% OF AMERICA GETS SCREWED?
9-23-2008 @ 12:20AM
R.G. said...
more banks are going to fail, if you have thoughts that say other wise, keep you hat on and wait. This is the start of the end of the union as I see it and that's very sad to say!. better start puting some money in a sock!
11-21-2008 @ 6:07PM
stephen said...
internation business should be fine but local us business should continue to struggle thanks to the rebloodlicans.
11-21-2008 @ 6:10PM
stephen said...
dos anyone have a privite jet, twise a mouth trips to the virgin island in a declining econamy.There big fat and happy!