With the global economic crisis in full swing, business owners are feeling the effects of the credit crunch. But with some careful planning, your business can survive ... and continue to thrive!
Here are some tips to help you get through the current economic situation and retain a successful business:
- Make sure you have an open line of communication between your business and your bank. If you can't make payments on loans you've taken out, let them know why you're short on cash and when you'll be able to pay them. This may help you stay in the good graces of the bank, and you should be able to keep the favourable terms you already established with the bank.
- Keep abreast of what's going on with your bank, and make sure you're not getting hit with hidden charges. Review your monthly bank statement to ensure the bank charges are correct. If you find that your current bank tacks on more charges than other comparable financial institutions, consider changing banks to reduce your monthly costs.
- Contact your accountant often to discuss your business and its financial situation. Inquire about any money-saving tips and develop a sound financial strategy for your company.
- Aim to maintain little to no credit card debt. You want to pay as little interest as possible, so try to keep your balance down to a minimum. If you have extra capital, you may want to use it to pay off credit card debt.
- Try to reschedule major capital expenditures, if possible. If you absolutely need to make a large investment in necessary equipment or stock for your business, do so. But try to keep spending down to the absolute minimum.
- This is probably not the best time to give out pay raises and bonuses. If you want to reward your employees, it's best to tie it to company profitability. Encouraging words also work wonders with employees.
These tips should help keep you on the right track to make it through the credit crunch. Remember, keep talking to your banks and your accountants to stay on top of your company's financial situation. With the right planning and hard work, you can begin 2009 with goals for a successful year for you and your business!