Broad economic slowdowns have trickled down to some small businesses, including those in relatively stable industries or geographic locations. Individuals tend to cut back on discretionary spending while corporations curb routine activities, delay major purchases and shelve new initiatives.

For many small businesses with limited resources, these and other factors often combine to pressure bottom lines past the breaking point, creating a domino effect of other dilemmas such as a credit crunch or layoffs.

L-A SCORE chairman and business executive Richard Kendall argues that a downturn doesn’t have to spell disaster for your small business, however. Kendall says “good financial management practices will help weather even the worst of economic times and help to capitalize on new opportunities that will come with the return of good times.”

Specifically, Kendall recommends the following:

Begin with the basics: Good recordkeeping, budgeting, cash flow monitoring and credit management are as important in surviving bad times as in good times.

Consult your bank: Lenders can tap their vast experience to advise you on issues specific to your business. Depending on your projected long-term expenses, consider arranging a line of credit in case a cash flow gap occurs.

Be on good terms with your creditors: Falling behind on payments is never the answer, even if it’s “just this once.” Creditors will be more amenable to renegotiating terms to small businesses they consider to be reliable.

Watch your receivables: By the same token, you need to stay on top of any outstanding debts to your company, particularly problem accounts. Be firm, but also willing to negotiate where appropriate.

Scrutinize your spending: Rather than arbitrarily slashing your budget, try to spend only on those things that have a justifiable positive effect on your business.

Step up your review of financials: Don’t wait for the usual monthly report. Getting them more frequently will help you make needed strategy adjustments in meeting changing market conditions.

Keep marketing in the mix: Look for cost-effective ways to keep your business visible to current customers and potential new markets. They may be ready to restart their spending long before the headlines state an end to the economic crisis.

To learn more about improving or starting your small business, contact SCORE at 782-3708. SCORE is a nonprofit association of more than 10,500 volunteer business counselors who provide free, confidential counseling and training workshops.

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