Archive for October, 2008

Due to the economic downturn, many traditional industries are in peril because resources are no longer in demand, consumers are scrimping instead of spending, and the financial institutions are in disarray.  To survive as a business, it’s paramount that now, more than ever, businesses need to innovate.  We’re on the cusp of a new economy and only the way to turn a profit will be to cater to consumers changing needs.

Financing from banks will no longer be easy to come by.  In turn, consumers will no longer be willing to accumulate loads of debt.  Therefore, conservation will soon become a common theme.  Concepts such as “green living” will soon become synonymous with “sustainable lifestyles,” “affordability,” and “living within your means.”  If this is what it means to “be green,” then so be it- consumers will want to live greener lives, and companies should adapt accordingly.

Economists claim that invest in energy efficiency and renewable-energy strategies could create 2 million US jobs in the next 2 years. And as many as 1 out of 4 workers in the US will be working in the renewable energy and energy efficiency industries by 2030, according to a separate recent report from the American Solar Energy Society.

The big question is: will Canadian businesses follow suit?

Entrepreneur.com outlines 50 ways to save money in your business.

Here are some of my ideas on how to increase your cashflow:

• Call in your Account Receivables the moment they’re due. Waiting to collect your AR reduces your cash flow substantially.
• Collect a portion of the payment up-front, prior to services being rendered.
• Stretch out the amount of time you take to pay your Accounts Payables (AP).  Pay at the last moment possible to maximize your cashflow.
• Review your AP records for overpayments and ensure that all sales taxes are fully recovered.
• Empower your employees to develop cost-cutting operational efficiencies.
• Strive for increased operational efficiencies in order to reduce inventory. Just In Time (JIT) or Lean manufacturing processes reduces inventory and increase cash flow.
• Liquidate excess inventory. Excess inventory is a double-negative because it not only requires extra warehousing/overhead/insurance costs to storehouse, but it also ties up cash flow.
• Take advantage of federal programs like IRAP and SRED.
• Barter with companies to achieve trade efficiencies through small business bartering.