working on a project to help new and financially struggling business owners...

As a business consultant for a number of other businesses these are exactly the problems that I see all the time. Here are the most common answers that I receive / find out when analysing their business:

1. What's your biggest expense?
   Wages. Time and time again people spend too much either paying themselves or over hiring in the anticipation that business will just come to them.
   
   
2. What is the most worrisome issue you face right now?
   Forward income. Currently the books of many of my clients don't look to bad, but their forward income looks patchy. Most clients of the businesses that I deal with at the moment are struggling to have their clients commit to anything more than 3 months out.
    
3. How has the recent economic downturn changed your business?
   The nice to haves are gone. Things like additional administrative staff and lower level employees who used to handle all the queries, or maybe the additional marketing budgets to spend, or the long client lunches. These things are gone from businesses that I deal with as they look to trim the fat.
    

Solutions?

These are the most common solutions I am implementing to assist with my clients' cash flow management:

• Receivables financing - particularly with longer lead times, to help with the tough times they are facing now;
• Cost cutting - particularly looking at the marketing and advertising budgets and being creative, squeezing the most out of dollar spent;
• Equipment financing - so many people view equipment financing as unnecessary. But when you are trying to expand, you may need some help, sometimes it's the only way to grow when your cashflow is tighter but you have new clients desperate for your services
• Service broadening - it used to be the case that many of my clients were picky about whom they wanted to work for and work for the higher margin clients. Now they are really chasing hard for all business, but are always conscious that not every client is worth it. Sometimes though their services can be used in a broader fashion than they thought.

Hope this helps.

Til later.

The Lad.