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Buzgate.org: Small Businesses Can Stay Afloat Even When the Water Keeps Rising

BUZGate.org provides tips on how to keep the cash flowing

July, 2008 | Exeter, NH - Small businesses are struggling to survive the nation's economic downturn brought on by a lack of bank funding, limited cash flow and increased operating costs - causing owners to fear the worst. Yet despite all the impending threats, there are still a number of ways for small businesses to keep financially afloat, say experts at BUZGate.org, the nation's leading resource and referral network for small business.

"Right now, the buzz is to raise prices. But it's a double-edged sword," says Deborah Osgood, cofounder and Chief Knowledge Officer at BUZGate.org. "It may be a necessity to raise prices because operating costs are increasing and you need to maintain a profit margin. But if you raise prices you may also lose market share, which means lost revenue. It's a dilemma. Other solutions are available if you do your homework and build your business support networks."

Osgood provides a list of tips small businesses might consider to best help stave off their current financial concerns:

  • Factoring can alleviate cash flow problems by selling outstanding invoices to a third party at a discount in return for immediate cash flow. Factoring also frees up time spent on tracking and collecting invoice payments from customers.
  • Outsourcing responsibilities like payroll, human resources, email marketing, background checks, and benefit plan management can save owners a substantial amount of money, time and reduce liability. By replacing in-house employees with outside vendors, owners also reduce employee related expenses including payroll taxes, benefit costs and supervisory demands.
  • Alternative Funding. Banks aren't the only game in town. For instance, retail businesses can allocate a future portion of credit card sales to receive immediate working capital. Additionally, many state and regional economic development organizations provide specialized sources of financing, particularly for businesses that may represent new jobs or other community benefits. Microloans, those under $35,000, can be a great source for funding short-term financial needs.
  • Telecommute. Cut back on office space, gas and energy costs by enabling your employees to work from home. There are many affordable technologies today that enable small businesses to support remote workers.
  • Negotiate. In tough economic times, vendors are often willing to work with long term, loyal customers. If you can pay early, ask for a discount. If you can't pay on time, ask for an extension to stretch out cash flow. You have nothing to lose and everything to gain by asking.
  • Alternative Shopping. Shop alternative venues such as bankruptcy auctions, hotel liquidators and government auctions for potentially significant savings on staple items such as furniture, fixtures, office supplies and equipment.
  • Lean and Mean Workforce. Reassess who does what and why to identify ways to refine workflow and eliminate any inefficiencies. Consider decreasing hours of operation to reduce part-time employees' payroll expenses.

For additional ideas, BUZGate.org provides free access to a network of targeted small business assistance programs, resources and most importantly, people in local communities across America that are available specifically to help you.

Using a new interactive tool called a Business Success System, entrepreneurs may now learn about whom in their local community or industry is available to provide answers to their problems. By visiting www.BUZGate.org, selecting what state your business operates in and then choosing Success System in the menu, anyone, anywhere, anytime can tap an extensive business assistance network by stage of business need including thinking about it, start-up, started but struggling, growth and networking.

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About BUZGate.org
BUZGate.org (the Business Utility Zone Gateway) is a public/private initiative that serves as a resource and referral network for the nation's millions of small businesses. BUZGate was created by William and Deborah Osgood, founders of the Knowledge Institute, and recognized leaders in small business development and education. BUZGate's resources are available to users at no cost. The site is fully supported by private sponsorships. Last year, more than 2 million users turned to BUZGate.org for advice and guidance. Visit www.BUZGate.org for more information.

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