It’s gotten pretty quiet out there about whether businesses can get loans; what was known as the “credit crisis.”  It hasn’t loosened up very much. Maybe there is money to lend.  Maybe there isn’t.  Even if there is, it seems that only those busineses with good credit, good assets and a good business plan will qualify.  These are the best risks.

But there is still another credit crisis out there.  That is the crisis that small- and medium-sized businesses are facing daily.  The question of whether to extend credit to its customers is a daily issue.  Can we afford to use up our limited credit line on extending credit to new customers?  What if we need it for materials or staff?  Or advertising?  Are there was to reduce our risks to enable us to get the business without losing our shirts?  These are questions that are asked more and more frequently as this recession continues.

Credit managers and other treasury people need to worry about these issues and make decisions based on proper policy, proper risk analysis and proper documentation (when they do lend).

Business owners and managers:  make sure you are thinking about this stuff other than when the need is immediate.

Bob Bernstein

…That’s hard to do when it seems like we have no control over the loss of a large percentage of our personal net worth.  Real estate values down, stock market values down.  Twenty-five percent (or more) of some peoples’ assets gone in a couple of months.

So, hard do you stay calm?  Well, as an individual, you take the long view and recognize that the markets always come back (unless you think this is really the end of civilization as we know it!).  In that case, you plan for when they start coming back (perhaps in a year or two).  If you are unlucky enough to need your invested money in the next couple of years, you have a problem.  I feel for people expecting to retire in a couple of years.  If they still had all their money in the market, perhaps they were not getting (or taking) good advice.

As a business owner or manager, you have to consider your market and customers and how the recession will affect them.  You should adjust accordingly.  If you have a business that will grow during this time, plan to take advantage of the market.  If your industry will suffer, then plan to take advantage of the opportunities to attract good employees from others in the industry, give good value nd god service and attract markt share.  If possible, use your cash wisely to be prepared for the upturn.  My father taught me a system for use that the craps table that had me conserve my cash so I could be around when the “good roll” came.  If you are too risky and plunge into things, then you may not be at the table when the good roll comes.

I follow that advice regularly.

Bob