Time to Buy – Your Way into a Job

If you’re looking for an employer or want to expand your business, now’s a good time to make a move.

Thanks to the recession, there’s never been a better time to buy a small business—provided you’ve got the financial wherewithal. There has been a surge in the number of small businesses going up for sale in the past few months, but only half as many have found buyers compared to the same period last year, according to BizBuySell.com, an online small-business marketplace. That means it’s a buyers’ market, conventional valuations are out the window and there are bargain-basement prices for investors willing to take a risk in a down market.

Among the small businesses that have sold this year, the median sales price has dropped by about 20 percent to $160,000 from $200,000 last year, the site reports.

Typically, brokers and market watchers gauge the value of these deals by dividing the asking price for a business by its annual revenue or cash flow. In the past few months, these figures, known as revenue or cash flow multiples, have dropped dramatically in closing prices, by between 2.5 and 8 percent. Until recently, both multiples were rising steadily…

How to Get Others to Pay Up

It’s old news now that many businesses, feeling the recessionary pinch, have been delaying payments to their suppliers. In boom times that might not create a crisis, but until the downturn ends, cash flow is probably a paramount concern. The following tips should help you get the money you’re owed.

Invoice Early
If you drag your feet on invoicing, you essentially keep cash from coming in. Plus, the longer it takes to get paid, the less likely you are to get paid. Stay on top of your accounts receivable, and send bills out promptly to get paid earlier and show that you are paying attention to outstanding balances.

Invoice Often
If you bill weekly instead of monthly, you won’t be waiting until the end of the month to send out invoices—and can get paid faster. If weekly is too much to handle, try biweekly instead…

Paying Your (Small Business) Bills

A certain business based in North Carolina is facing tough times like everyone else. Its forklifts, once commanding strong prices in good times, haven’t seen demand decrease — just customers’ ability to pay on time. Its cash-flow strategy? Milk the mom-and-pop customers for what they have, and tighten the trade terms (the period during which the company will extend credit while customers get their own cash-flow situation together).

But, for the most part, small businesses report, suppliers aren’t putting the squeeze on their customers — everyone needs the business they can get. Usually, the vendors are putting the squeeze on the suppliers to come in at a lower price point.

Be that as it may, here’s how to manage a bullying vendor who’s pressuring you to pay now…

iPhone Apps to Manage Cash Woes

You don’t have to ditch your office space like Big Moving Picture did in order to survive the recession. To keep its business intact until conditions improved, the San Diego-based company went into “hibernation,” shutting the office, dismissing some employees and going virtual with the rest of the team.

In the recession, virtual means cost efficient, but you need certain tools to ensure it’s also time- and effort-efficient, too.

If you’re one of the growing number of business users carrying an iPhone, you’ll be happy to know that there are several apps available to help with one key area of business: cash flow management.

Quicken – If you use QuickBooks to manage your cash flow, this app lets you look into your balance, latest transactions, enter transactions from the road and see how it’s all performing against monthly budget levels. ($9.95/month per account)

Calc-12E RPN Financial Calculator – If you don’t already know what the HP-12C is, this probably isn’t for you. Based on the most popular portable financial calculator out there, the 12E is indispensable for business owners who need the accountant’s calculator on hand in meetings with investors, in real estate deals and the like. Enter and edit cash flows, add comparative investment analysis. ($19.99 download)

Spreadsheet – You’ll need the spreadsheet app from Softalk. It doesn’t do much on its own, but it will come in handy when you want to review Excel budgets from the road. ($7.99 download)

Credit Card Terminal – If you want to collect payments on the spot – and why not seize the moment when customers are offering – this app, while not cheap, can keep cash flowing. ($49.99 to download, $25/month subscription, and $.24 per transaction)

Omni Invoice – This app allows you to issue invoices from the road. Speeding up the process of getting paid. ($9.99 to download)

Up, Down or Sideways? How to Price in a Recession

The downturn has forced businesses large, small and in-between to rethink their pricing strategies. High-end designers like Badgley Mischka and Alberta Ferretti are lowering their prices. Monster Cable did the same. Restaurants around the country are reducing what they charge.

While slashing prices seems like an obvious way to hang on to revenue, it’s not necessarily the smartest one. Colgate-Palmolive and Procter & Gamble actually raised prices in the first quarter of 2009, betting that the increases would more than offset the loss in sales—and saw P&G saw its sales go up.

So which direction should you go in? There’s no one-size-fits-all strategy for pricing, even in a downturn. However, there’s one principle that applies to everybody, says Rob Docters, partner at Abbey Road Associates, a Connecticut-based boutique strategy consulting firm: “You need to be able to understand how the decision-making processes of your customers have changed,” he says. “If you don’t think, ‘What would I do in their shoes?’ you’re going to lose.”…

When Credit, Not Cash, is King

It might seem strange, in a downturn pinched by a credit crunch, to suggest thinking about credit. But the lag between delivery and payment – that time when you’re waiting on customers and your suppliers are waiting on you — is nothing new. But in tough times, it can get worse, as the domino effect of cash flow hits your supplier – and then you. No doubt you have some reserves on hand (right?) for rainy days like this. But don’t forget about credit – not just a business credit line, but an ongoing business credit card that you can use in a pinch.

There are advantages to both cash and credit, but don’t forget, use of credit can help keep your credit history in good standing, even if you’d rather keep the debt to a minimum in these times. Here are four tips for using credit to help you manage your cash flow and get back to the work of delivering great products and services…