Cash is Like Chocolate

Just like chocolate you can never have enough cash, challenging economic times or not. A few ways to preserve cash are:

• Leasing instead of buying outright.  Yes long-term the cost maybe higher but when you need cash now it helps you extend how long you have your cash. Your ability to do this and the interest rate will  depend on your credit rating and other factors.  Make sure to read the fine print if you go this route.
• eBay, Craig's List & Flea Markets are great places to sell furniture, equipment, high-end clothing and the like you no longer want or use. Everyone loves a bargain!
• Use other people's money by extending your line of credit and negotiating extended terms with certain vendors.  There may be a little wiggle-room left in the credit markets for really good customers to get an extension from a bank on their line of credit.  Some banks have shut-down even their best customers which would suggest those good customers just might want to seek a new banking relationship. Vendors may negotiate if you are a big customer.
• Don't be your customers' bank.  Tighten your credit terms to ensure timely collection of accounts receivable.
• Give employees time-off rather than bonuses.  It's summer time and many might welcome a few more vacation days.
• Use your credit cards when all else fails.  Not a method I like to see used often but when necessary it can be a great strategic move. You also need a strategy for paying them back.

I recommend checking out The New York Times special section on small business that ran on Wednesday, May 21.  Several of the articles address the issues created by the current economic environment.

I look forward to your comments on other ways to preserve cash.

Susan C. Hammond
Consultant/Coach/Facilitator
scHammond Advisors