CPAs Offer Eight Steps Aiding Entrepreneurs In
Tough Economic Times
The AICPA (www.AICPA.org)
is the nation�s largest professional non-profit association
representing more than 340,000 CPAs that specialize in the area of
tax, accounting, and consulting services such as personal finance.
As one of small
businesses� most trusted advisors, CPA�s offer these eight steps to
help entrepreneurs in tough economic times:
Focus on your balance sheet.
love to talk about sales and tell you how many millions of sales
they had this year, but as you get closer to the recession the focus
should be on your balance sheet. Make sure you�re managing your
cashflow well. It�s something you should be doing all the time but
it�s even more critical in a recessionary environment, because
there�s just that much less cash floating around. While the going is
still good, try to put cash aside to build a war chest.
Diversify and launch.
downturns have a benefit for business. A recession gives you the
opportunity to step back, rethink, and review all sectors of your
operation. Consider launching a new product or service offering not
currently offered in your market. Use the time for diversifying your
products, services, or industries so you don�t have too many eggs in
one sinking basket.
Start looking at your credit and debt.
begin looking at increasing your debt. Negotiating with a bank from
a position of power and good financial resources in a good economy
is a lot easier to do than trying to negotiate in a recessionary
environment. Don�t think of that extra credit simply in terms of
reserves to get you through cash-trickling times.
Review your accounts receivables.
When things are
starting to turn down, you want to keep a sharp eye out for someone
who is in to you for quite a bit, because if they go under and cash
is tight that could have a huge impact on your small business.
Similarly, review your agreements with suppliers. Maybe you don�t
have to pay in 30 days; maybe you can pay in 45. Again, it�s easier
to negotiate in a good economy than in a downturn.
Review your company discretionary spending items.
businesses are typically very lean, recession survivors often still
manage to trim some fat. Think of all the discretionary items. Take
whatever steps you can to reduce your debt. The less you have to pay
out on a regular basis during an economic slowdown, the less painful
it will be. Employ labor and time-saving technology to reduce
business costs. More effective use of the Internet can save on
travel, training, administration, and operations costs.
Review your customers.
about how a recession will impact your customers. If your customer
base is involved, for example, in the home-building industry, and
home building is down, then you know these customers are not going
to be demanding as much product, so you better get ready for that.
One way to do that is to search out alternatives. Somebody�s always
making money, even in a recession, so if you can find out where
those pockets are and if you have services you can provide to them,
maybe you want to expand those services.
Now is also the
time to take customer service to a new level. Get in touch and stay
in touch with your active customers. Take nothing for granted. Make
sure your pricing is competitive, your service exceptional and your
attitude reflects how much you value their business. Revisit dormant
customers and see what you can do to bring them back into the fold.
takes as little as just asking to restart a relationship. Other
times it can take some imagination, but resurrecting a past customer
can still be easier and less expensive than finding and breaking in
a new one. Ask your customers for referrals. While this is a good
practice at any time, it is particularly important in a down
Step 7: Keep
cannot afford to stop marketing, regardless of economic conditions.
New products are always sure revenue generators if marketed
properly. Determine what sets your business apart from the
competition and market it like crazy. Attend networking functions,
spruce up your Web site, send out post cards, put out a new sign in
front of your office.
however, doesn�t have to come from new customers. Many
small-business owners can find that their best prospects for new
revenue are their existing customers and clients�established
relationships mean an owner doesn�t have to spend time, energy and
money trying to make a good impression and knowledge of customers�
needs makes it easier to come up with new products or services
they�ll want to buy.
prospecting for new business or working with a long-standing
customer, success can turn on making a valid case that your product
or service will benefit the buyer, even if the economic times are
Step 8: Do
profession in the United States has created free resources and tools
to help small business owners with personal finance issues.
To learn more check out the CPA profession�s 360 Degrees of
Financial Literacy visit
www.360financialliteracy.org and check out the