Small Business Failures in America - Cash Flow Issues

We are noticing an increase in the length of time it takes Large corporations to pay on their invoices to our team. Fortune 500s are tending to pay their vendors more slowly, which will hurt the already strapped small businesses in America. These same small businesses employ 2/3 the population and do a great service in supplying the needs of corporations.

At the company I run, The Car Wash Guys, has retail and fleet customers. Retail pay cash, which tends to offset the problems with the extended late payments from fleet accounts. It appears that the corporations are conserving their cash to keep earning up until the next quarter, however this will hurt their long term efforts in that the small businesses who provided real time services and parts will not be able to meet the real time demand and therefore cause cost overruns for the Manufacturing sectors. Therefore decreasing productivity and causing a problem with their efficiency efforts. Who will be hurt worst? Likely high tech non able to perform on time for their industries, and their stockholders in decreased valuations of stocks, which do not hit their earnings guestimatation or quotas. Also hurt will be the retail outlets who need items in the store on time to meet consumer demand. The biggest hurt in the long haul will be all of us in America due to increased small business failures of those operating on a shoe string.

Some of these weak small businesses should be weeded out thru abnormal free market factors such as this slow pay and others who are just working to hit ROIs and pay off loans will be hurt. This hurts interest rates because risk adverse banks stop lending to small businesses. It hurts SBA guaranteed loan programs and that affects all of us. It is serious and will most likely lead to unnecessary laying off of people who make up the largest percentage of American working people. Small businesses represent 2/3 of all American Workers. It think this problem will get worse as CFO look for ways to keep cash as long as possible, by stringing out their receivables. Phone companies, electric companies and other bills must be paid on time by the small businesses, whereas theses companies are notorious for slow pay in tough economic times. It seems to be the little guy who gets it in the shorts, such is life and an acceptable given, yet it also effects us as our customer base is decreasing.

What about the labor and layoffs? As small businesses are unable to employ the lion share of the masses, there will be fewer with money to spend on those items sold by larger corporations.

How does this occur and how are small businesses losing? Slow pay means slow payment of bills and adverse credit scores. Also the 60 days of cash flow in the bank will be used in the float. That float some small businesses can absorb, but some small businesses will be beaten down and become inefficient and cannot last that 60 days and neither can most of the nearly 28 million small businesses in this country that pay their bills, buy products and services and feed the families of their workers.

This is the most serious problem facing the US economy and it is still moving in the wrong direction as of first quarter 2001. This is not good. Historically Car Washing tracks the new car sales markets, so our particular company should be fine. Also as any small business will tell you they must be constantly adapting their methods of operations to those forces, which might be a threat.

"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

---

Do You Own Your Business Or Does It Own You?

What was your aim when you went into business for... Read More

Government Does Not Pay Its Bills on Time

Many small companies work very hard to get new accounts.... Read More

How the Crab Effect Obstructs Growth and How to Conquer It

Some of the greatest words of wisdom for any man... Read More

The Role of the Business Model and Strategy for Business

People will always stress that having a well researched business... Read More

Business Pain Defined

Every company has business pain, but the pain does not... Read More

Comparing Boston Area for a mobile car wash business

The Boston suburbs seem to be rich with possible locations... Read More

Old Data in Database Marketing Software

Database Problems in MarketingI have been working on a direct... Read More

Starting a Small Business: Balancing Risk and Reward

In a perfect world, starting a small business would be... Read More

Encouraging Your Customers to Pay On Time

Nothing can drive a business down faster than customers who... Read More

Forming a Corporation ? Investors

You've come up with the best idea since sliced bread,... Read More

How to Increase the Cash Flow in Your Private Practice in 30 Days

If you have a busy private practice, chances are you... Read More

Top Ten Tips for Leveraging Conferences for Big SUCCESS!

As I am preparing for my attendance to the CoachVille's... Read More

Building A Business That Works For You

Before you want to build your business, you need to... Read More

What Your Small Business Can Learn From The Doctor

Most doctors never distinguish the difference between customers and patients.... Read More

10 Hiring Tips for Small Business Owners

As a successful small business owner,you're accustomed to long hours;... Read More

Starting a Business in New Hampshire

Hew Hampshire car wash market. Well we have visited every... Read More

Make Your Business More Profitable

More sales and more profit. Isn't that what you want... Read More

Doing Business With Friends: Five Tips for Preserving the Friendship... and Your Sanity!

My colleague, Jane, recently lamented to me an all too... Read More

Four Reasons Why Small Businesses Succeed (or Fail)

The American system of business management has been admired and... Read More

How to Prepare for Your Start-Up Venture!

When you awoke this morning, you found yourself buzzing with... Read More

A Small Business Must Have a Solid Foundation

We all know that a building has to have a... Read More

North County San Diego Small Business

North County San Diego has had some significant growth, and... Read More

Trailblazer Interview with Diane J. Levin, Partnering Solutions

Today is a Red Letter Day! It's special because today... Read More

How To Build Business Credit

Having their own business is something many millions of people... Read More

The Step Zero Effect

The key to organizational focus and helping those who need... Read More

Drivng Home the Point - An Outsourcing Story in China

A few years ago, I visited Beijing for the first... Read More

Using Technology to Manage Customer Loyalty

Don't let your customer satisfaction research initiative collect dust on... Read More

Proper Care and Feeding of the Business Owner

That sizzling sound you're hearing may be a symptom of... Read More

Create a Win Win for Your Small Business

Discover How Specialized Cost Containment Creates A New Win-Win Position... Read More

Making Your Product Desirable For Alliance Partners

How do you make sure you have the business solutions... Read More

Small Business Survival Tips

No matter what kind of small business you have, you... Read More

Boston Market; Mobile Auto Detailing

Boston itself covers 50 square miles of concrete and traffic,... Read More

But This Is Just My Opinion

Hi, Charles...here, Your Cap and t-shirt guy From Texas. How... Read More