Small Business Corner

It has been over a year since I was able to post to The Voice of Batesville due to a number of issues at the ASU SBTDC that prevented me from being able to contribute. However I am back and will be posting regular contributions on issues of interest to small businesses and entrepreneurs in Independence County. Look for weekly posts on a variety of topics. Since it has been so long however I thought it best that my first post for 2010 be a little background on me and on the work I do at Arkansas State University Small Business and Technology Development Center. I apologize in advance if it looks like an “info-mercial” but thought it a good idea to give readers an idea of what I do and how we assist small businesses.

The Arkansas State University Small Business and Technology Development Center, ASU SBTDC, is part of a statewide net­work of seven cen­ters work­ing out of uni­ver­si­ties across the state. We offer eco­nomic devel­op­ment help to start-​up and exist­ing busi­nesses through con­sult­ing, train­ing work­shops & sem­i­nars, as well as mar­ket research assis­tance. Our assis­tance areas include:

· fea­si­bil­ity studies
· busi­ness plans
· mar­ket research
· finan­cial analysis
· loan pack­ag­ing
· marketing
· e-​commerce and social media marketing

All of our con­sult­ing assis­tance and mar­ket research is free of charge and com­pletely con­fi­den­tial. Our train­ing sem­i­nars gen­er­ally do have reg­is­tra­tion fees from $25 to $49 depend­ing on the type of seminar.

I have been the cen­ter direc­tor at ASU SBTDC for over four­teen years help­ing entre­pre­neurs and small busi­nesses in a fif­teen county area with a vari­ety of busi­ness needs. For more infor­ma­tion about how the ASBTDC can help your busi­ness please visit our state web­site, shoot me an e-​mail or join us on Facebook. We would love to talk to you about your busi­ness and how we might work with you.
I will be post­ing weekly arti­cles on a vari­ety of top­ics that are gen­er­ally of inter­est to our small busi­ness clients. I hope they will prove use­ful to you. We need your opin­ion so let me know what you think. I thought a good way to start would be to dis­cuss a topic that has caught the inter­est of a lot of our small busi­ness clients, Social Media Marketing. Look for that arti­cle next week about how social media marketing can work for your business.

Reconnecting With Your Customers to Beat the Recession

As small business owners throughout Northeast and North Central Arkansas continue to deal with the ongoing recession, many are asking “Where did my customers go?” Plummeting 4th quarter sales will continue into 2009. Don’t expect to see any relief until possibly the 4th quarter of 2009. So what are small businesses to do? Sitting back is not an option, most of them don’t have enough cash to “turtle down” until the recession peters out so it means either go ahead and close the doors now or learn how to reconnect with your customers and keeps your business growing despite the economy.

The other day I received an excellent 4 page report entitled, “Cash-Strapped Customers Are Cutting Back on (Almost) Everything” by Susan Reda, Executive Editor for NFR’s Stores an on-line marketing news service. The study, conducted by BIGresearch and Stores is a must read for every small business owner shedding light on what your customers are thinking about. Great information about what consumers consider “must keep” and what “I can live without”. If your holiday sales were less than hoped for, this report will not only tell you why customers stayed away and why they will not be rushing back anytime soon. To read this article go to http://www.stores.org/. You will find it very informative about your customers and their attitudes toward spending in the present economic climate. But first, finish reading this.

Obviously there is a lot of powerful information in the report and I will be sharing it with my small business clients at the Small Business and Technology Development Center. But in addition to the nuts and bolts of what they are buying and what they are leaving on the shelf, the article brings out three very specific concepts I feel are just as important. These three “nuggets” go ay beyond the statistics in the report.

First: Consumer attitudes and spending behaviors are not static or chiseled on stone tablets. Goods and services that were considered “must have” two or three years ago when the economy was rocking along are suddenly on the chopping block.

Median income households then thought the only way to keep in shape was to buy membership at state-of-the art fitness centers. Middle income women thought nothing of adding upscale handbags to their accessory collections on a regular basis, and Eating out at nice restaurants with $30-50 entrees was given at least once a week.

So owners of fitness centers, boutiques and good restaurants built their business models around these consumer attitudes, and three years ago these were valid assumptions. But as this study points out, guess what consumers have decided isn’t as important anymore? You got it…they can save money by:
· not renewing their membership to the fitness center and just work out at home,
· while they still buy apparel they are hitting the local discount stores instead of the boutiques, and,
· Many consumers are renewing their love affair with the drive thru window at local fast food places instead of the full service restaurant.

Bottom line, what was a valid assumption three years ago is no longer correct in today’s economy. Consumer behavior is NOT static, it changes based on outside factors and the small business owner must be able to read these changes and adjust to meet these new realities.

Second: Because consumer behavior is not static, small business owners must learn to continually be scanning their environment for changes. Before launching your new venture you spent hours, days or even months studying the feasibility of your project to ensure the best probability of success. You studied consumer attitudes about your product or service, you analyzed the market and your competitors to learn all you could before launching that fitness center.

But then you stopped doing your homework, became complacent and your consumers have switched gears on you. The lesson here is that a small business owner can never stop getting updated information necessary to make changes to his business model as his environment changes. I received this Stores report the other day in my in box from my e-mail. It is just one of a dozen daily e-newsletters I receive electronically on a variety of topics that are important to my clients. I dedicate a minimum of one hour a day just reading these articles to find items that are relevant and then pass them on to my clients or filing away for a future article or seminar and to ensure I am up to date on latest trends.

A small business owner needs to do the same. You don’t have to get dozens of reports daily like I do, but you need to find one or two that are relevant to your industry or your market, subscribe to them (most are free) and discipline yourself to read, think, and act on the information that will affect your business. This is one area that many of my small business clients do not do as good a job at as they should. They are so busy with the day-to-day operations that they don’t take the extra hour in the day to gather intelligence to help them plan for what will be happening next month or next year.

Of course thanks to the Internet (more on that further on) you can easily be completely overwhelmed by the volume of information that is available, so it is important to decide what sources you need to have and what you do not. If you are a small retailer or service business I would strongly suggest that you start with your trade publications or association e-newsletters. Another excellent source that we use at the ASU SBTDC comes from an on-line e-news service called SmartBrief. The service provides free, e-mail based news summaries and other content for industry associations, professional organizations, advocacy groups and their constituents. You can chose to subscribe to any of dozens of special e-newsletters in that impact your industry at no charge. To search for free subscriptions relevant to your business, go to http://www.smartbrief.com/ and sign up. But as with any information it is only valuable if you actually use it. That means subscribe, discipline yourself to read regularly, consider the information and then act on the data.

Finally something that may be a shock to many small businesses was that the vast majority of the consumers surveyed in the Stores study said that Their Internet service was an absolute necessity regardless of other cutting back on other expenses. 86% of the consumers (regardless of age) polled said that they would continue to pay to stay connected to the web. Of course if you are an internet service provider or sell computer hardware or software this is good news, but it has a much more far reaching implication to virtually every business owner who is reading this article regardless of the business you are in. Because the internet is where your customers live and it is the new medium that you must use to communicate with them.

It’s not just where your teenagers talk to their BFFs on MySpace, not just where grandma goes to do her genealogy. Or those sites dad surfs at night when he thinks everyone is in bed. Across the board in virtually all age categories the Internet is where they seek to do business with you.
Although some consumers prefer to make their actual purchase inside a store, a majority do their “window shopping” on-line first. Your customers were spending their time on-line searching for information about products or services that they want to buy, looking for the right features, prices and discounts. Once they found what they wanted, they then search on-line for the stores in their area that carried it before they set out to make the actual purchase. That means if you don’t have a website for your business, you were virtually invisible to these potential customers. It is no longer a question of “should I have a website? In the 21st Century marketplace it is an absolute necessity even if you don’t actually sell your product or service on-line.

Internet marketing can take on any number of unique opportunities for you to connect and build relationships with the consumers you want to attract by sending e-mail messages, using e-coupons, providing them with information, and more. At the ASU SBDTC we have virtually abandoned newspaper advertisement for workshops and drastically cut back on the number of training calendars we print and mail through the post office. Instead personalized messages are sent out to our clients by e-mail about specific workshops that we think would be of interest to them. Our training calendars are e-mailed on a quarterly basis with updates and the cost of e-mail postage is…zero.

In addition to expanded use of e-mail we are exploring internet marketing through social media networking. I write articles for blogs like this one that not only provide information of value to the reader but also markets our services and training because every article includes information about the ASBTDC and how to contact us electronically. I also maintain profiles on several social media networks such as FaceBook, Plaxo, LinkedIn, and Twitter as ways to connect and communicate with potential customers. These are just a few examples of internet marketing opportunities that more and more small businesses are learning to take advantage of to grow their businesses.

If words like viral marketing, twitter, search engine optimization, and social media networks sound like Greek to you, don’t despair there is plenty of help available to bring your business on-line in nice easy baby steps. But the most important concept here is that it is absolutely vital that your small business start to develop an effective web presence and to start to take advantage of the tremendous marketing opportunities available through the Internet. I guarantee your competitors are already there.

I try to keep my articles to a maximum of three topics to ensure they are easily digestible by readers so it is time to bring this to a close. The most important idea that I hope any small business owner takes away from this is that it is not enough just to unlock the front door of your store, flip on the “Open” sign, throw some advertisements at the local newspaper and then sit back for customers to beat a path to your door. To remain competitive in these difficult economic times small business owners must:

• Understand and adjust their business to the new economic realities of consumer pending. What worked last year is not going to work now.
• Commit to continual education and research of news affecting your business is vital to adjusting your business model and developing effective product or service mixes that will appeal to your customers
• Embrace the new realities of the electronic age where every business owner must not just accept the Internet but learn to take advantage of the tremendous marketing potential it provides to them to communicate with customers on a personal level never before possible.
  

For many small business owners these may seem daunting tasks but survival in this new economic landscape will not come from “business as usual”. Your Batesville Area Chamber of Commerce has partnered with the ASU Small Business and Technology Development Center to provide its membership with free and confidential consulting assistance from marketing, market research, cash flow planning to e-commerce.

The Chamber and the ASU SBTDC are offering a variety of short 3 hour seminars in the Batesville area over the next three months covering topics vital to your business success such as Simple Market Research Tools, Recession Proofing Your Business, E-Commerce and Web Design, Guerrilla Marketing and much more. Thanks to a partnership with Citizens Bank, First Community Bank, First National Banking Company (FNBC), First Southern Bank, Liberty Bank of Arkansas and the Main Street Batesville program your chamber is able to offer these invaluable seminars at significantly reduced rates and even better discounts for its membership. For more information about the Chamber-ASU SBTDC consulting services and workshops call the Batesville Chamber or the ASU SBTDC at (870) 972-3517 or e-mail Jonah.Shumate@mybatesville.org or hlawrenc@astate.edu to give your business the edge it needs.

Coming Recession Proofing Your Business Seminars:
Mountain Home – Tuesday, February 17th 6-9 pm Baxter County Library 424 West 7th Avenue
Batesville – Thursday, February 19th 6-9 pm UACCB Independence Hall Room 104

Call the ASU SBTDC (870) 972-3517 or e-mail sglasgow@astate.edu to register for any of these. Batesville and Mountain Home attendees ask about Chamber membership discounts.

Really Simple Market Research Tools for Small Business

Over the years my business consultant and I have met lots of folks looking to start their own business. Generally after offering them a cup of coffee and asking what type of business they are planning to launch, my next question is, “so, what have you done up to this point to estimate the market demand?”. Typical responses usually go something like these:




· “My gut tells me it can’t miss!”
· “my mom said she would come to my store”
· “Everyone at church thinks it is a really good idea… we need one of those in town”


“Besides, I am here to get help putting a loan package together, what’s market research got to do with my loan request?” Of course that nasty habit bankers have of asking how you plan to pay the loan back could be a hint. But usually when you talk about market research their eyes roll back into their heads. They think market research takes lots of money, lots of surveys, and statistics, certainly way above what a small business person could afford or understand.



The truth is, market research is absolutely critical to small businesses, regardless of the type of product or service and thanks to the internet, the data is easily available at reasonable costs, you just have to know what type of information you need. Market research tells my small business owner:

How many potential customers are in the trade zone
How much they will spend on a product or service
Where they are located
What demographic, socio-graphic or other factors influence buying decisions and how to break the market into homogenous sub groups to target
Who competitors are, where they are, and what their weaknesses are.

Whether the client is in retail or wholesale, manufacturing or service, transportation or health care, businesses (B2B) or to consumers (B2C) knowing the answers to the questions above is vital to long-term success. Part of the problem of course is the amount of information out there especially on the internet. A “googled” market research resulted in 23,900,000 hits and free market research narrowed the field to only 38,900 possible sites. What to use? What is best? What is a scam? Easy to see why entrepreneurs throw up their hands and just “go on their gut.”

At the Small Business and Technology Development Center we use Hill Search, the James J. Hill on Line Reference Library for a lot of our clients initial market research needs. As a quick example, let’s assume a client in Batesville, Arkansas (Independence County) came in to the office and wanted help finding market research information to determine feasibility of starting a retail jewelry store in that county. For this article we will keep it simple, a primary trade Zone of Independence County only and strictly a brick and mortar business (we will discuss e-commerce market research in another article).

Using the Hill Search Library in 45 minutes I was able to provide the entrepreneur with a good thumb nail sketch of the market potential for an additional jewelry store in that county and an initial market segmentation outline.

For the initial review I used three separate Hill Library resources:

· their DemographicsNow database that provides extensive demographic information about households and basic consumer expenditure data on trade zones (by zip code, town, county, MSA, state or region) that told me everything I wanted to know about demographic makeup of households in Independence County as well as overall consumer expenditure information on apparel and jewelry spending.

· From there hopped over to the Hill Library New Strategist Demographic eBooks, over 30 on-line books with specific information about how much consumers spend on a wide variety of products and services broken out by demographic sub categories. I used their “Who is Buying Apparel” and “Best Customers: Demographics of Consumer Demand” eBooks to get detailed expenditure information on jewelry by a variety of demographic sub categories including income, age, education, and more. This information combined with the county household demographics will determine not only overall county demand for jewelry but also help segment the households to find out who the best potential customers may be.

· Finally stopped in at the Hill Library Special Issues database, searched for “jewelry” and found 8 industry reports outlining the State of the Jewelry industry for 2008, forecasts for the coming year and much more. All in about 45 minutes of searching.

So what did I have to report to my “client”? From the DemographicNow section I found:
There are 13,888 households in the county as of 2008, up from 13,467 in the 2000 census and projected to grow to 14,148 households by 2013. With average household income of $48,236 in 2008 and projected to grow to $53,821 by 2013.

The average household in Independence County spent $121.00 per year on jewelry (not including watches or repair) So overall market potential for the county to purchase jewelry was just over $1.68 million and is projected to grow to $132.00 per household by 2013 or a overall market potential growth in next 4 years to just under $1.8 million.

At the present time there are only 2 existing jewelry retail stores in town. There were three, but a regional chain was forced to close in the fall. Of course Walmart and J C Penney have jewelry counters with sales, and jewelry is sold at various pawn shops in the area, even the gum ball machine outside Krogers. But only 2 retail jewelers. And total retail sales of jewelry in the county was less than $485,700.00 which meant that many consumers were buying their jewelry outside of the county so a leakage existed that might be exploited.

From the eBooks on Consumer Expenditure I found out who buys the most jewelry by demographic features. As a summary:

Households earning under $20,000 will spend an average of $30 a year on jewelry while households earning $70-80,000 per year will spend 171.32 per household and those earning over $100,000 will spend $353 per household on jewelry. Obviously there are far more households earning under $20,000 than over $100,000.00 but does quantity matter or does quality? High income households spend three times the average on jewelry and account for 40% of the total market. The 3,315 households earning under $20,000 will spend $30 a year or a market potential for that segment of only $99,450. But the 1,093 households earning over $100,000 will spend $353 per year or $385,829. Households earning over $100,000 make up only 7.8% of all households but will buy 23% of all the jewelry. See how segmentation works?

Households where head of household is a high school graduate will spend average of $75 per year on jewelry, while those with a Masters or doctoral degree will spend $227.9 on average.

Married couples without children at home (empty nesters) spend 37% more than average.
Two age groups own most of the market 25-34 year olds (many buying engagement rings) and 55 to 64 year olds (many buying anniversary gifts).

Now, we can go back to DemographicsNow to find the actual number of households by the different income, age, even educational levels and apply that information to see how much my best customers will spend. Finally the industry information from the Jewelry Retail Association Trade magazines will provide information on issues impacting stores in the coming year.
A complete copy of all of the information is available for anyone who would like to see an example of what the data looks like and the format. I will be happy to send it to you if you leave a comment requesting it or shoot me an e-mail.

So, if a small business or entrepreneur wanted to purchase this data what would it cost? Demographic data on Independence County and summary jewelry expenditure data from a source called Demographics Now published by SRC, LLC. You can find a wide variety of consumer expenditure data, demographic data on a variety of groupings by zip, city, county, and state, MSA for all over the country for only $60 dollars per month or $550.00 per year. Specific demographic expenditure by categories and best customer eBooks lists from New Strategist Publishing which you can access for $60 to $80 per e-book. Or you can access all of this information along with a lot more data from the James J Hill On-Line Research Library for $1,295 per year subscription. Industry specific information is available from the Jewelry Retail Trade Association for a fee as well.

However, the Arkansas Small Business and Technology Development Center network offices are all paid members of the Hill Search Library which means that their clients have access to all of this data through the center at no charge. Plus the ASBTDC staff provides free assistance in analyzing the data and helping the client make decisions based on the information. There is no charge to be a client, nor for any assistance through the centers.

Finding good, reliable market research data is possible. It is just a matter of knowing where to look. The Hill Library is an excellent tool, or using the free services of the ASBTDC to help develop initial market research. Next week, drilling down to find customers in your trade zone.I will expand on types of market research in future articles that will look at other tools and information available to small business owners in Arkansas. Let me know if this is useful. If you would like a copy of the demographic, consumer expenditure or industry information to see what the data look like, let me know. Post a comment or send me an e-mail and I will be happy to send you this example.

Next week we will discuss how to drill down market research information to target specific customers you want to target for your marketing plans.

New Web site unveiled for Arkansas Military Veterans and their Families

Arkansas military veterans and their families now have a new one-stop resource on the web for all things related to benefits and assistance programs. The web portal, http://arkansasveteran.com/ was unveiled Saturday, January 10th in four locations around the state as part of the 30 Day Reintegration Program for the Arkansas National Guard’s 39th Brigade Combat Team just returning from its second tour in Iraq. I was over in Russellville visiting with over 150 National Guard soldiers and their families from the 1st Battalion 206th FA welcoming them back and telling them about the new portal. The web portal was developed by the Arkansas Small Business and Technology Development Center network through a grant provided by the U.S. Small Business Administration’s Veterans Assistance and Service Program as a partnership effort between the ASBTDC, SBA, and the Arkansas National Guard. What makes this portal so unique is that it brings together, in one place veteran related resources, news, information and agency contacts for active-duty, reserve and national guard, as well as prior service and retired veterans.

Although the site was paid for through a grant from the U.S. Small Business Administration and obviously has a lot of content to provide assistance to military veterans and their families who are either small business owners or considering starting a business, the site provides resources to all veterans, regardless of whether they are business owners or not. The web portal provides links and information about veteran benefits, educational and employment opportunities, health care assistance, disabilities assistance, housing, family matters and legal issues in addition to assistance to small businesses. There are many governmental agencies and non-profit organizations that provide assistance to veterans; this portal was designed to help the veteran locate the resources needed by going to one site. It was also designed to be interactive, not just a webpage with links. Veterans or their families can subscribe to veteran related news feeds and join forum discussion groups about topics of interest or concern to them. By making it an interactive web portal, Arkansas veterans now have access to a centralized source for all of their needs.

It is also intended to provide information and assistance to those veterans or their families we call “Vet-repreneurs” who either own a small business or are considering starting a business. Through our links, news feeds, on-line forums and on-line training opportunities, these Vet-repreneurs have access to information, consulting and training to grow their businesses all at no charge.

We owe a tremendous debt to our state’s veterans and their families for their service to this great nation. This web portal is one small way that the Arkansas Small Business and Technology Development Center network is doing its part to show them our support. If you are a veteran or family member of a veteran I strongly encourage you to take advantage of the assistance available through the portal. If you know a veteran, please pass this on to them and let them know about it.

I am often asked why I spend so much of my time working with veteran owned businesses and those veterans who are considering opening their own business since they make up such a small percentage of the total population. My response, as a retired military officer and father of a young Army captain currently on active duty, is that not only is it the right thing to do, but it makes good economic sense.

I have been working with small businesses and entrepreneurs for over 12 years at the ASU Small Business and Technology Development Center. When I meet these individuals I have learned to look much further than the quality of their business plan. I look in their eyes because I am looking to see if they have what it takes to make the business a success. When I am assessing whether an individual has the real commitment to starting a business I look for determination, a willingness to sacrifice, the ability to endure difficult times, and the ability to subordinate their immediate wants for the long-term good of the business. What I have found out over the years is that those attributes I am looking for in the would-be entrepreneur are the exact qualities that I see every day when I talk to our veterans, especially those young soldiers in the Arkansas National Guard and Reserves. Those young men and women, through their service especially over the past five years of war, demonstrate all those traits that are necessary to make their business idea successful. So not only is it “the right thing to do”, it makes good sense because as a group these soldiers are much more likely to see their plan through and make the business a success.

If you are a veteran, go to the web portal and get involved. If you know a veteran, pass this information on to them. They will thank you for it. And when you meet a veteran, especially one of our young men or women who are part of the Arkansas National Guard and Reserves, thank them from the bottom of your heart because they have made a commitment to serve this country so your children can grow up in a country where they have the right to chose.

Sincerely,

Herb Lawrence

Competitive Advantages for Small Businesses Even in a Down Economy

I know the economy is tough, and many small business owners are concerned about keeping afloat during this recession. But savvy entrepreneurs have some competitive advantages over larger businesses that they can use if they will just start thinking outside the box especially in the area of marketing. As larger businesses downsize and start to “turtle up” there are opportunities for entrepreneurs to exploit their natural competitive advantages to connect with customers in new and innovative ways. Here is a short list of what I consider to be perfect advantages of small businesses if they will just put them to work.

First – successful entrepreneurs have always known that they can’t be all things to all people instead they adopt a narrow market focus. By finding a small segment of customer they can create a strong reputation for serving a narrow market by finding a lucrative niche.

Second- Small businesses are much closer to their actual customers. They know the issues affecting their customers because it is affecting them as well and can alter their product or service to give customers what they need. By being closer to their customers they can easily create new products or services or change their offering bundles to help their customers.

Third they have better opportunities to partner with other businesses to create networks of strategic partnerships to help each other meet customer needs.

Fourth – without a large marketing budget, small business owners have an opportunity to use Guerrilla Marketing tactics, low cost even no cost innovative ways to establish real relationships and communications to their customers. Real marketing after all is nothing more than developing trust and confidence between the business and the customer to be mutually beneficial to one another.

Fifth – building on number 4, small business is personal. Customers and markets are hungry for businesses that allow them to connect to something beyond the product or service. Entrepreneurs who understand that first and foremost they are selling relationships can deliver a value story that has meaning to customers.

Finally – technology, especially using e-commerce and social media options can dramatically improve a small business’s ability to communicate with customers at very reduced costs in ways never before available. Even if your small business does not sell product or service over the internet, having a web presence is vital and using e-business tools to connect with possible customers has never been greater.

Yes, the economy is rough right now but instead of wringing your hands and hoping it will go away; savvy entrepreneurs are surviving, even thriving by capitalizing on their natural competitive advantages especially in developing innovative marketing opportunities. Share your thoughts about advantages small businesses have when it comes to marketing and developing business relationships.

Keeping Cash Flowing in a Recession

by Herb Lawrence,
Center Director,
ASU Small Business and Technology Development Center
hlawrenc@astate.edu.

2009 is starting off as a tough year especially for small businesses as they deal with a recession, a credit crisis, and the fallout from the banking meltdowns. Add to the mix reduced consumer spending and it is spelling a real challenge as they try ride out the current economic downturn. No one knows exactly how long this recession will last; some economists expect it to go into late 2009 or even 2010. Cash flow management does not happen by accident, it takes careful planning and knowing all of your options. At the Arkansas State University Small Business and Technology Development Center some areas that we suggest clients consider include:

Talk to your banker NOW; discuss how they may be able to assist you with possible cash flow issues. If they can’t be there for you, consider alternative lenders.

Get monthly cash flow projections prepared now. Micro managing cash is critical to long term survival. Tighten your belt in ways that don’t show. Make internet calls instead of using phone carriers and e-mail documents instead of printing and mailing. Look at energy saving programs. But if you are already running out of cash then slash expenses as if your life depended on it. Reduce salaries temporarily, making sure you take the biggest cut. Get rid of every ounce of fat on your income statement, but keep muscle. Forgo raises and cash bonuses instead offer days off, early Fridays, flextime or other options.

Speed up collections from customers – Ask customers to pay in 10 days rather than 30 in return for a discount. If you can afford it consider offering 5% discount for payment within 5 days instead of the usual 2/10 net 30. Speed up cash inflow by asking for payment by credit card.

Renegotiate vendor relationships - Shop with other suppliers. See if your current vendors will provide a discount for early payment or by credit card. Your vendors are in this recession as well and may prefer some money to no money for their cash flow. If you are already in trouble, tell your suppliers and work out extended payments over a six to nine month period.

Liquidate inventory – Call it a “The Economy Stinks Sale” excess inventory that is not being sold does not bring in cash.

Sell off unneeded assets - look at any equipment, furniture or fixtures or other fixed assets that your business has that is not being used and sell those off if possible, even look at your personal assets.

How long the current recession will last is anybody’s guess, but careful cash flow planning to retain liquidity will be a must for most small businesses. The ASU SBTDC provides free consulting assistance to small businesses in Northeast and North-Central Arkansas. For more information about how the ASU SBTDC can help your business maintain liquidity call Herb Lawrence, Center Director or Laura Miller, Business Consultant at (870) 972-3517 or e-mail hlawrenc@astate.edu.