Focus on thriving in a bad economy
By Kathy Dean-Bradley
Credit is tightening, portfolios are falling, and consumers are bracing. How can your business succeed in the current economy? Now more than ever you should rely on many tools and services available to the small business owner. John Osoinach of the Delaware Small Business Development Center, Jayne Armstrong of the U.S. Small Business Administration, and Kenneth Godwin of Belfint, Lyons & Shuman, P.A. highlighted some of the key strategies for success to a group of bankers, accountants, and small business owners at the annual seminar hosted by Belfint, Lyons & Shuman, P.A., a Wilmington, DE CPA firm.
The Delaware Small Business Development Center is a partnership with University of Delaware and offers training, education, and advisory services to help the small business owner move towards growth and to develop management systems. John's "back to basics" advice is to revisit and update your business plan. Regular quarterly plans and budget projections will help minimize the uncertainty of the current environment and allow you to make better decisions.
Focus on your customers: Know who they are, and understand what motivates them to purchase your product or service and use that to your advantage. Analyze your financial statements. Look frequently at your income statement, balance sheet, and cash flow statement, and work closely with your accountant to use liquidity, operations, and profitability ratios which will provide the most insight into your particular business. Maximize your cash flow. Review carefully your relationships with creditors and customers to whom you have extended credit. Now may be the time to renegotiate with suppliers and tighten inventory. The goal of management is to stay flexible in these times; challenge the way you have been doing business, and expose inefficiencies.
The Small Business Administration can be an important source of resources and resource partners as you are starting or growing your business. Contact your local district office. There you can take advantage of the counseling arms such as SCORE (Service Corps Of Retired Executives), Women's Business Centers, and Veteran's Business Outreach Centers. The SBA offers a number of financial assistance programs and stresses that for many loans the paperwork is minimal and funding can be obtained in as little as a few hours. These programs are streamlined, easy, and should be utilized by the small business owner. Specialized programs such as the 504 loans provide an opportunity for owners to secure lending for commercial real estate and heavy equipment with low fees, long-term rates, and low down payments. Work with your district office and discover all the options available for your needs.
Remember that Congress has passed recent legislation to stimulate the economy and generate revenue. Explore the recent changes with your accountant and see how they may benefit your business. The increase in business mileage rate per mile, bonus depreciation and Section 179 fixed asset deduction can increase your cash flow and cut financing costs.
Don't face these tough times alone. Use your advisors and resources and make the right decisions for your business.
About the author
Kathy Dean-Bradley is a senior tax and small business accountant with the Delaware CPA firm of Belfint, Lyons & Shuman, P.A.. She is involved with tax planning for businesses and individuals and is specializing in providing tax planning and compliance services for the medical and nonprofit industries.