Stress is building as many small business owners watch the economy evaporate in front of their eyes.   As the economic news continues to worsen daily they struggle to meet their most basic obligations. If the slowdown continues, some may face hard decisions.
However, most entrepreneurs have a sink or swim mentality. Focus on the right things and you can get through this downturn.

Today and tomorrow, Promotional Consultant Today will explore 10 ways to stay focused and survive these challenging times. Today we’ll look at the first five.

1. Cash flow is king:  As a small business owner, you must know how your cash flows. This isn’t fancy accounting; it’s simply tracking how cash comes in versus how it goes out. Take two hours, and use your QuickBooks or check register to get a grasp of this monetary movement.

2. Trim the fat:  Many small businesses experienced a tremendous run in the last 10 years. Since they had good cash flow coming in the door, they allowed fat to accumulate in the things going out the door.  Now is the time to look at where your money is going, and eliminate unnecessary items.
Think about trading in business Hummer for a less expensive and fuel-efficient car and getting rid of that expensive copier lease.
In addition, you may need to make some tough decisions about eliminating employees. It’s critical to quickly get your cash outflows to a manageable level.

3. Look into the future:  When clients and projects were rolling, most entrepreneurs believed new business would materialize whenever things temporarily slowed down. Those times are gone. Analyze what money is coming in during the next three months, specifically from where, and when. Compare this to the new cash outflows that you assessed in step No. 2. If things are tight, that’s fine; if more is going out than coming in, trim more and find additional income. Do this exercise each month, always looking three months out.

4. Get back to basics:  When you first went into business, you may have had to fight and claw to make ends meet. Make a list of the things you did then to bring in revenue. You probably moved away from many of those strategies when business improved. This is the time to aggressively return to them.

5. Avoid the evil temptation:  It’s tempting to use debt and credit cards to borrow your way through slow times. Since no one knows how long this slump will last, borrowing may result in the demise of your business. Say “no” to using credit cards, the equity in your home, or any other borrowing. Resolve that you’re going to scratch and claw your way through this using the cash flows of the business. You’ll come out stronger in the end.

Source: Thomas E. Houck, CPA, CFP, is a speaker, author and consultant whose program, “Your CFO Advantage” helps business owners grow their businesses, reduce their taxes and lower their stress level. His book, The Top 10 Mistakes Business Owners Make (and how to fix them), helps business owners develop strategies to lead a better life by running a better business.