A weekly look at Wyoming business questions from the Wyoming Small Business Development
Center, part of WyomingEntrepreneur.Biz, a collection of business assistance programs
at the University of Wyoming.
By Bruce Morse, WSBDC Region II director
"I have been in business for several years and things were going OK, although occasionally cash flow was a bit tight. However, in the last year or so sales have dropped and now "tight" is the rule rather than the exception. Any suggestions? Marie, Worland
Your situation is not uncommon for many small business owners. They were getting by when the economy was cooking along, but when consumers started to cut back on spending, especially on non-essential items, many small businesses began feeling the pinch.
Every business is positioned differently in terms of overhead, employees, debt structure and the owner's personal ability to withstand a slow down. There is no one answer to your question, but here are some things you might consider if applicable.
If you have outstanding debt, talk to your lender about possibly restructuring it so that you are afforded some short-term payment relief. It is often in their best interest to work with you through a tough time rather than having to liquidate the business.
A new Small Business Administration (SBA) program called ARC (American Recovery Capital) also may be an option. Can you make better use of your employees and gain some efficiency there? Salaries or wages are often among the larger expenses incurred by businesses. Is your marketing working? You need to keep marketing because stopping it will likely make matters worse. Could you make better use of those marketing dollars by changing the mix?
If you are seeking new funding, a lender may look to an SBA guarantee to make them more comfortable in loaning you the money. The SBA has made it more attractive for lenders to use their program by providing higher guarantee percentages and more attractive for the borrowers by reducing or eliminating the guarantee fees they are usually required to pay.
Please note that the SBA does not generally make loans directly. Instead, you would work through a conventional lender and they would seek the guarantee if they feel it is necessary.
For more information about SBA programs visit the Web site at www.sba.gov. If you need assistance in developing a loan request or analyzing a current financial picture, contact the nearest Small Business Development Center and we will be glad to help.
A blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, e-mail wsbdc@uwyo.edu or write 1000 E. University Ave., Dept. 3922, Laramie, WY 82071-3922.
Posted on Tuesday, September 08, 2009