In a recession or stagnant economy like we are facing now, companies are more cautious and more cost conscious. They are gravitating to low risk customers and suppliers and are streamlining operations. This Three "M” business strategy are ideas to help your company in this uncertain economy.
1. Maximize Cash Flow
- Reduce receivables with credit card processing to get faster access to your money.
- Increase cash availability with a line of credit.
- For deposits, request expedited check clearing from your bank.
- Consolidate to one banking relationship and transfer funds less often.
- Increase cash flow with a line of credit for future equipment leases.
- Utilize remote data processing for depositing checks to expedite use of funds.
2. Minimize Risk
- Bank with a strong institution and a knowledgeable banker to assure stability.
- Bank with an institution with a consistent credit approach.
- Establish a relationship with a bank that is committed to small business lending.
- Consult with professional investment representatives that are relationship focused; you can’t afford to lose principal with rates of return so low.
- Enjoy a stable and safe rate of return with an FDIC insured Savings or Money Market account.
- Analyze your business and personal insurance to assure adequacy.
3. Manage Your Costs
- Consolidate your bank accounts to capitalize on low cost relationship pricing.
- Refinance high rate loans. We are in a historical low rate environment, and there’s no better time then the present. This could help lower your payments and interest rate costs.
- Discount your suppliers by prepaying with a low rate line of credit.
- Review all of your insurance, medical and retirement fund costs.
- Make sure you have the right CPA that can advise you and maximize your tax credits.
In uncertain times, business owners need to maximize cash flow, minimize risk, and manage costs to be successful. Which of these have you done lately? Do you have any other ideas to add?