The Web Authority

Has the blow-back from the US economic crisis affected your business yet?

If so what pull-back approach are you taking?

Are you cutting advertising as a result of efforts to trim costs?

Have your client account payments been affected?

These are just a few of the questions that small business owner such as myself and my clients are discussing. I had one client tell me that his own client base had just simply stopped paying on time. We have experienced several client situations where we have had to turn client accounts over for collection for the first time in eight years.

In a tough economy, such as ours, it is important to keep a cool head and focus on your business longevity. Many of us will be able to weather this storm and come out stronger, unlike some industries such as the real estate and the mortgage industry, where the crisis is so deep that some firms are being driven out of business.

So what do you do when times are tough for your business? One quick comment, it is not the US alone, but a global issue. I have chatted with several contemporaries in Spain and the United Kingdom who are experiencing many of the same issues that we are in the US in regards to draw-down and pull-back.

This is what my firm is doing:

1. Getting very proactive with slow payers to bring them into line with our payment terms.

2. Working with a collection agency for the first time in eight years to collect accounts over 90 days old.

3. Reviewing carefully our spending history. This is not necessarily a time to just routinely upgrade software. I have purchased some upgrades but made very careful selections, but others, I will defer to later or indefinitely.

4. Carefully reviewed my business profitability. If I cannot offer a service profitably, I have dropped it or realigned it to be profitable; factoring in the cost of credit card processing and overhead has been extremely important in some of my most recent decisions in regards to pricing models.

5. Stopped doing business with clients that simply will not pay on time and sap my available time with collection efforts.

What have you done to keep you business afloat in these trying times? Click add your comment below and leave me a note. I would be most interested in hearing what you are doing to move your business forward.

We’re not alone when it comes to getting the “squeeze”! It’s all around you - higher gas prices, pending winter fuel price increases, rising food prices, increases in Internet service, changes to credit policies, the list is endless and growing.

It is not surprising that many businesses are trimming down, cutting back or being forced to raise prices to offset the increase in costs to just stay in business.  So what can you do, anything to stay profitable in this changing and shifting business climate?

Here are a few tips to help you weather the storm and stay profitable.

1. Trim your overhead first any way you can before you automatically consider a price increase passed on to customers. It may be as simple as moving from 24 pound paper to 22 pound paper, not ordering office supplies that simply sit on the shelf - ordering only when needed, to installing a programmable thermostat in your office. Trim where you can smartly first.

2. If you do feel that you must raise your prices to cover your overhead, be sure that you can afford to do so. It is naturally for some clients to simply decide to chop your services when you increase prices. If losing any clients will mean real trouble for you, consider layoffs, payroll cuts, and dropping perks before raising your prices first. For some raising prices may simply mean better efficiency and improved quality of life, for other raising prices may start a downward spiral that will be hard to stop.

3. Work smarter, try to share the load when you have multiple tasks. Here’s one example it may be more cost efficient to turn over routine reporting tasks to a person who you will pay $25/hour to and then have the higher paid team members start an ad on selling program to existing clients with their new free time. Make sure that all clients know about your service offerings. You may be able to very easily pick up extra business with a few phone calls offering expanded services to your existing client base. You may even want to consider adding services to your offerings to complement what you do sell or provide now looking to sell more to the clients you do have now.

Anyway you look at it, the business client is tightening, pulling in, and adjusting. Make sure to look for creative options before you try to put the “squeeze” on your own customers.