If you see a crunch coming, barter, liquidate inventory, ask clients for push payments, and renegotiate vender relationships, just for starters

By Jill Hamburg Coplan

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If turn into money is king, the castle remain is looking pretty bare with regard to entrepreneurs, grappling by a recession, a credit acme, and the fallout from an unexampled series of bank meltdowns. An October survey of business owners through PNC Financial Services Group (PNC) found 68% expected a cash crunch in the coming six months, up from 48% a year gone. Even businesses that are adding customers and shipping more product can be at risk if cash inflows lag outflows.

Naturally, you want to bill immediately, collect diligently, and enforce a credit cunning that filters out objectionable customers. If that stationary isn’t sufficiency, turnaround experts have a few more ideas for surviving a cash pinch in uncertain times.

1. Investigate your lender. Few banks are increasing lines of credit, but if your financial institution itself is in bad shape, “open up discussions immediately,” says Allan Tepper, a CPA and finance consultant to selfish companies. “If they’re not there on account of you, consider alternative lenders.” You might also approximate a merit union: Their lending is up 36% over last year.

2. Forewarned is forearmed. Get a cash-flow projection from your bookkeeper or accountant (or use accounting software to generate a true the same yourself) each month. From there, you can micromanage your cash position to get ahead of any huge payments. You could ask healthy customers to pay in 10 days rather than 30, in return for a rebate. If you can afford it, offer 5% off for payment within five days (instead of the customary 2% for payment within 10 days), says Larry Rice, a CPA and monitor of strategic consulting with Rodman & Rodman in Newton, Mass. Just make without doubt the payment date is clear on the invoice.

3. Get payments in send, and by credit card. Most clients will resist paying up front, on the contrary a few may prefer to pay a fixed amount by month especially than getting sandbagged with a large bill—and a scarcely any clients may be all you need. You be possible to speed things up by asking for payment by credit card. Even in businesses that have not traditionally kept their customers’ credit cards on file, it’s becoming increasingly common to process payments automatically.

4. Tighten your belt, however make sure the cost-cutting measures don’t show. Make Internet calls instead of using traditional phone carriers, and e-mail documents (in a secure file format) instead of printing and mailing them. Save bottom by turning opposite computers and printers. In northern climes, program the thermostat to fire up the warmth righteous before the workday begins and shut it away an hour before it ends, suggests Jennifer Kluge, president of the National Association for Business Resources, a membership association in chilly Warren, Mich.

1. Cut payroll, but be creative. You can’t hold fast out of the way of scrutinizing your biggest charge, nor should you. But “keep the people you need and make stable they’re light-hearted,” says Julie Lenzer Kirk, a former tech entrepreneur turned lecturer and consultant. Forgo raises and cash bonuses and instead offer days off, early Fridays, flextime or telecommuting benefits, or even an unpaid sabbatical or teaching reimbursement. You might create a four-day workweek, institute a no-overtime policy, or shift from a richer PPO health-care plan into disgrace to an HMO to survive the crunch.

2. Barter. Elizabeth Donley, CEO of Stemina Biomarker Discovery in Madison, Wis., barters with her software consultant: He does statistical and Web site work for her company, and in exchange, she lets him shape his business gone out of her excess office space. That’sitting netting her company $50,000 in savings transversely the length of the 15-month contract. If you can’t moil it through on your own, inspect organized traffic by exchanges exchanges and networks (there are hundreds). Just be sure to put all agreements in writing and record them for tax purposes.

3. Renegotiate seller relationships.