How Businesses Can Hoard Their Cash
Advice for Women Entrepreneurs
1. - Ask for Discounts. - It should go without saying that it will help preserve cash if you shop around, buy in smaller quantities,
and negotiate lower prices. When times are tough and suppliers are hungry for business, you'll be surprised at how many will lower prices if you ask but they're not going to volunteer.
2. - Pay Less for Credit Card Processing. - If you take credit cards, chances are that you pay your processor too much and so give up cash you need every day. As a general rule, if you solicit a number of bids and buy your own processing equipment, you'll save a significant amount.
3. - Stop Paying for Equipment You Don't Need. - When times are good, it's easy to commit to buying or leasing expensive equipment. Take a hard look at everything you own, especially items you're still paying for and sell everything you don't absolutely need. Cancel leases on nonessential equipment, asking to return it to the vendor.
4. - Call the Landlord. - Renegotiating a lease to get a lower rate is rarely easy. But if tenants in your area are thin on the ground, and especially if your lease will be up for renewal soon, chances are good that your landlord will give you a better deal if you push.
5. - Sublet Unneeded Space. - If your business is losing money, your real estate may now be your most valuable asset make sure it's producing every penny it can. Especially if your business down sizes, rent out unused space if your lease allows it (you may need your landlord's prior consent). You might even look at moving your business to another location and renting out your entire building.
6. - Stay Close to Home. - If your business still does a significant amount of travel, cut it at least in half. Just committing to this will force you to focus on eliminating the less profitable trips.
7. - Reduce Professional Fees. - Handing out money at $300 per hour is no way to save your business. Ask your lawyer and accountant to give you a recession discount, and if it's not forthcoming, shop around for someone who will. Be sure you understand what your lawyer's minimum billing interval is. If it's 20 minutes (meaning you are billed for a minimum of 20 minutes for every call, no matter how short), bunch your questions together so you use all of the time you'll have to pay for.
8. - Cautiously Cut Back on Insurance. - In tough economic times, the last thing you want to do is eliminate essential insurance coverage for fire, theft, and liability. But it might make sense to increase deductibles and cancel non essential coverage for things like business interruption or the death of a key employee.
9. - Renegotiate Contracts. - Even if you've signed a contract to buy a product or service, negotiate your way out of it. If you are willing to pay a reasonable buyout fee, it's legal, honorable, and practical. After all, once clued in to your financial problems, the other party may be happy to accept a partial payment from you rather than risk receiving no payment at all if your business fails.
Source: nolo
Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.
Advice for women entrepreneurs.
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