Archive for Accounting
Before you get into business……
Posted by: | CommentsIf you are thinking about going into a small business make sure you get things in order.
Step 1:
Have a plan for getting out of business. This is important because it will effect how you run the business.
If your plan to get out of business is “shut it down and declare bankruptcy”, your day-to-day decision process will be totally different than if your get out of business plan is “create a business worth $1,000,000… sell it and go to the beach.”
If you have a business partner you need a plan for you and your partner to get a divorce without killing your business. How does that work? Get a buy/sell agreement that is sensible, logical, definable and finance-able. How will you buy out your partner (or how will he buy you out)? Get a small business loan? Write a check? Give him a note? What if you or your partner gets hit by a truck? Do you want the spouse or kids as a partner? Have a plan even though you hope you don’t need it.
Step 2:
Make certain you’ve got Step 1 done very well.
Every business owner leaves their business at some point, every single one. Think about the end of the game before the end game is here.
Excess government spending will harm small business
Posted by: | CommentsThis not a rant about any political party. Bush and the Republicans spent like drunken soldiers also. The Obama administration had a lot to deal with in a short time but they have gone way beyond what’s needed to fix the economy and have ended up in the deep end of the pool….where deficits harm everyone.
Small businesses need to be prepared. If government deficit spending isn’t curtailed we will face years, maybe decades of slow or no growth and high inflation.
What should a small business do now? Conserve cash…even if it means not paying down debt. Cash is your only protection from catastrophic events, either economic or political.
Don’t be fooled by the recent stock market performance, it’s based on hopes and dreams… not any reasonable expectation of low inflation and growth.
Conserving cash means passing up opportunities with risk to conserve cash and have more protection on the downside. Conserving cash also helps slow growth but growth is a macro issue and your financial well being is a micro issue.
Protect yourself first. You’ll sleep better.