Buy an Umbrella While the Sun is Shining

By Barry Thomsen

Isn’t it great when your business is doing well? You can’t wait to get to work every day to see how much money you’re going to make.

However, there’s an old saying: “Don’t wait until it starts raining to buy an umbrella.” The savvy small business person will always have several umbrellas in the closet. Just like the weather, business conditions can be sunny for days, then a sudden storm comes up. It even rains in the desert once in a while—so don’t think stormy times can’t hit your company.

It’s when times are good and money is available that you need to plan and prepare for the difficult times—whether you believe they are coming or not. Here are some ways you can prepare for any downturn:

• Pay down any credit lines so they are available when you may need to use them again. You’ll pay less interest on a lower balance.
  
  
• Reduce or pay off any company credit card balances. This will release more available credit and get rid of that high interest you're paying.
  
  
• Apply for new company credit cards when your credit is very good and you can get them at a low interest rate. Transfer higher interest balances to these new accounts.
  
  
• Put money away in a company mutual fund, especially if the market has been down lately. A money market fund is the next best choice or, if you’re really conservative, a CD.
  
  
• Prepay insurance premiums so they won’t become a burden later. You may even get a small discount for paying in advance. Call your agent or company service department and make your best deal.
  
  
• Stock up on stamps or fill your postage meter when excess funds are available. Stamps and postage are good anytime and can be listed as an asset under “prepaid postage.” If you’re planning a future big mailing, you can make a postage deposit at a reputable mail house.
  
  
• If you are paying your suppliers on time or early, you may be able to negotiate better terms or discounts. Plus, if you speed up their cash flow, you’ll move up on their “favorite customer” list.
  
  
• Take advantage of quantity discounts. Stock up on your best-selling products before costs rise if you have storage or warehouse space available.
  
  
• Reward your employees —pizza parties, small gifts, bonuses, etc. They will remember your kindness and help you through any tough times.
  
  
• Stock up on expensive office supplies such as copier and laser toner, pens, copy paper, etc. when they go on sale. Buy in larger quantities for additional savings. Have someone scan all the sales literature you get to find deals on products you order regularly.
  
  
• Do any needed manufacturing and office equipment maintenance now. Breakdowns during tough times can be a real disaster. Review all warranties and have preventive service done.
  
  
• Do market research and product testing. The secret to reversing a downturn later may be a new product or service you develop now. Be ready to move ahead quickly when and if the need arises.
  
  
• Test new mailings or direct mail pieces. You’ll be ready if market conditions change and you need a quick influx of new customers. Testing during good times will save you money on future mailings.
  
  
• Start a customer appreciation program while you can easily pay for promotional items like loyalty cards, scratch-offs cards and other little bonus items.

You worked hard and long for many years at a low income in order to build a profitable business. And, understandably, you don’t ever want to go back to those tough times again. Just remember to prepare for a rainy day. If you’re smart and prepared, you can dodge the puddles and survive until the sun comes out again.

These AMA seminars are just a sampling of AMA’s courses that can help small business owners succeed:

• Strategic Planning
• Performance Measures for Your Business : How to Determine and Measure What Really Counts

AMA On-site: Every one of AMA’s 170+ public seminars can be delivered on-site. This flexible, money-saving option allows you to train ten or more people, when and where you choose, at a low cost per participant.

Author Bio: Barry Thomsen is publisher/editor of Small Business Idea-Letter and Small Business Advisor. For a free sample of the Idea-Letter, email: idealetter@aol.com or call 877-700-1322. On the Web: Small Business Marketing Ideas www.idealetter.com