Surviving the hard times...

Here's a list of tips for small business for surviving the economy. Thank you to Christy Schmitt, Union Bank of California's senior vice president and small business segment manager. I couldn't get the whole list in the hard copy story, so here you go.

COST CONTROLS

Inventory. Find ways to trim inventory levels. If you're at six months, get to three. If you are 60 days, get to 30. If you are at 30 days, get to seven.

Budget. Create weekly flash reports to monitor spending and revenue.

Payroll. Let positions go dark as staff leave. This preserves cash, and is better for moral than layoffs. Consider part-time or temp services to perform some duties.

Equipment. Sell machines that you use occasionally, or which you bought as a want during better times. Negotiate to lease or rent equipment and software only when you need them.

Space. Consolidate operations into one building, and sublease unused space. Renogotiate lease terms, especially with landlords facing high vacancy rates.

Payables. Negotiate to lengthen terms or earn discounts with longtime vendors. Pay on 60 days, even forgoing 30-day discounts, to conserve cash.

Extras. Trim the luxuries. Stop buying coffee for the break room or providing meals and beverages for meetings.

Credit. Be conservative about seeking credit. Credit costs money. Review all outstanding credit on your books, and investigate refinancing to take advantage of the lowering interest rate trend. If you decide to pursue credit, go beyond the application to document how you've cut costs and managed for success.

REVENUE MANAGEMENT

Clients. Review your accounts list. Is there business you've turned away in the past because it was too small? No business is too small in today's environment, provided it generates a profit.

Receivables. Find a bank that will pay your merchant service receipts within 24 hours. Don't extend terms beyond 30 days to customers. Collect aggressively. Don't extend credit or terms unless you've verified that a customer is in a position to repay. The less credit you you've extended, the more cash you have on hand.

Cash accounts. Look for a strong bank, and match deposit rates against a bank's strength. Consider depositing operating capital in small business premium money market funds, and longterm capital in 12-month CDs.