You may be in mail order, direct mail, or you may be a local merchant with 150 employees; whichever, however or whatever, you’ve got to know how to keep your business alive during economic recessions. Anytime the cash flow in a business, large or small, starts to tighten up, the money management of that business has to be run as a tight ship.
Some of the things you can do include protecting yourself from expenditures made on sudden impulse. We’ve all bought merchandise or services we really didn’t need simply because we were in the mood, or perhaps in response to the persuasiveness of the advertising or the persuasiveness of the salesperson. Then we come to a couple of days later and find that we’ve committed hundreds of dollars of business funds for an item or service that’s not essential to the success of our own business, .
If your business is incorporated, you can easily eliminate these impulse purchases by including in your by-laws a clause that states: All purchasing decisions over (a certain amount) are contingent upon approval by the board of directors. This will force you to consider any impulse purchases of considerable cost, and may even be a reminder in the case of smaller purchases.
If your business is a partnership, you can state, when faced with a buying decision, that all purchases are contingent upon the approval of a third party. In reality, the third party can be your partner, one of your department heads, or even one of your suppliers.
If your business is a sole proprietorship, you don’t have much to worry about really, because as an individual you have three days to think about your purchase, and then to nullify that purchase if you think you don’t really need it or can’t afford it.
While you may think you cannot afford it, be sure that you don’t short-change yourself on professional services. This would apply especially during a time of emergency. Anytime you commit yourself and move ahead without completely investigating all the angles, and preparing yourself for all the contingencies that may arise, you’re skating on thin ice. Regardless of the costs involved, it always pays off in the long run to seek out the advice of experienced professionals before embarking on a plan that could ruin you.
As an example, an experienced business consultant can fill you in on the 1244 stock advantages. Getting eligibility for the 1244 stock category is a very simple process, but one with the potential to create tremendous benefits to your business.