Many small businesses had to stop spending last year around this time of year. All indications are that the recession is almost over, so small businesses can get back to normal. So now is a good time to consider what the recession has done to your business.
Think about how the economic changes have affected your industry in general. Has your customer base changed? Have your competitors started cutting prices? What about their service offerings? Are you keeping up? Recessions cause changes, and it is important to examine all aspects of your business.
If you and your small business have been through layoffs, salary reductions or worse in order to survive the recession, there are some important things to keep in mind as things start to get better.
First, many companies are going to begin hiring again, which means you could get some new staffers after another company goes out of business. But your employees also might get a better offer too. So make sure they are satisfied, or you could lose them. Many people are looking for making more money to pay off their bills after the last year.
Also be careful about what you spend money on. Now that business is getting better. Priorities might include new computers, versus redecorating. Think about long term versus short-term debts.
Many businesses have learned how to use invoice factoring to stay afloat during the recession. And that tactic can be continued after the new year begins. It is a great way to pay down your debt, while keeping cash flow strong.
What’s more, there is a popular new factoring strategy called spot factoring. It is when one invoice at a time is factored. It is not a loan – it is the purchase of financial assets, or receivables from a factoring company. Traditional bank loans involve two parties, while factoring involves three parties. Banks base their decisions on a company’s credit worthiness, while factoring is based on the value of the receivables. With invoice factoring, there are no minimums, no maximums, and no long-term commitments.
Single invoice factoring can help your small business get back on its feet. How? Many businesses do not get paid right away for delivered products/services. This negatively impacts cash flow and can make it hard for the business to produce new orders in a timely fashion. Invoice factoring benefits businesses that do not get paid for 30, 60 or 90 days by advancing up to 90 percent of the invoice total, at the time of order fulfillment. IFG looks at the creditworthiness of the client’s customers and can provide funding within as little as 24 hours.
Kristin Gabriel is a writer who works with The Interface Financial Group (IFG), North America’s largest alternative funding source for small business. The company provides short-term financial resources including invoice factoring, serving clients in more than 30 industries in the United States, Canada, Australia and New Zealand. IFG offers expertise in factoring, accounting, finance, law, marketing and banking.