The Obamaconomy and Your Business

Every business owner and manager is keenly aware of the miserable state of the Obamacomony. Wherever we turn we hear of layoffs, cutbacks, business closings, bankruptcy, foreclosure and other financial travesties. All of this means that there are normal business concerns that should be elevated in bad economic times.

Everyday that you are in business you must be aware of financial losses from low margins on sales, supplier rip-offs, employee theft and non-pay customers. In dire economic times these sitautions should be a much greater concern . . . with a few more additions.

Suppliers, whether it is the company itself or just an unscrupulous delivery person, can cause losses for your business. The additional concern is that you make a substantial payment to a supplier on Friday only to learn on Monday that they filed for bankruptcy, and you lost your money. It may take longer to get credits for returns or receive any earned bonuses, rebates or incentive funding which can impact your cash flow.

Employee theft may increase for any of several ways. Obviously employees hat are cash strapped may be tempted to skim from the register, take donation money, or steal or forge checks. Employees may be tempted to steal product to sell for cash. Employees may also try to work side deals with your customers to make extra money. Being alert, and moving employees around (including changing up their interaction with customers) can make a big difference.

The last two, customer non-pay and low sales margins, are increasingly related. When times get tough there are less sales opportunities. This means that sellers tend to accept orders for much lower prices which obviously means that the risk of financial loss is very real. Further, it's often a distant thought that the people placing orders may be in bad financial shape. This means that a company may spend their time and money to fulfill an order only to not receive payment or have payments drag far beyond 120 days. Taking on too many of these orders will consume your cash flow or credit line and effectively stall (read:KILL) your business.

You should look for trouble signs and intervene when you perceive a problem. It's your business so don't be afriad to ask questions, change payment terms or even put some customers on lower credit lines. Red flags can include a customer making payments far slower than normal, finding "reasons" for unpaid invoices, switching from cash payments to credit cards, asking for very lenient credit terms, or suddenly adding other suppliers (where that negotiated lower prices to switch).

We believe that you never want "all of the business" - there is a lot of business that you don't want. When times get bad the volume of "business you don't want" may be higher. We all know that money is the lifeblood of every business. Keep an eye on yours and don't lose your business when trying to survive the Obamaconomy.