Small business owners can better cope with the economic crisis if they eliminate granting credit to individuals as this minimizes their risks. At the same time, this help struggling customers remain free from debt.
This was just one of the tips that Eric Plinske has for small businesses to survive during lean times. A small business development expert, Plinske is a panelist in the upcoming seminar, “Business Survival: Smart Moves for Trying Times.”
“Eliminate credit for individuals. It's what drives them to the ground. They've got to pay in cash. .You just need to be consistent and not bend your rules for other customers,” said Plinske.
This principle applies to small retail stores that accept credit purchases from minimum wage earners, who often struggle financially.
As for companies who have receivables, they should be aggressive and persistent in collecting. If needed, companies can tap the help of professional collection agencies.
“We've got some good collecting agencies here. They're effective in what they do,” he said.
It also helps if companies put a cap on business accounts for receivables.
As for people who have payables, it is wise to ask for an extension of terms of payables to avoid “credit crunch.”
“Credit crunch will kill you,” he said.
This happens when a company has a shorter period of settling payables than in collecting receivables.
To address this, Plinske advises companies to get longer payment terms for ordered merchandize than the payment time by customers.
“For example, let your customers pay cash in 15 days and ask your vendor for a payment term that is longer than that,” he said.
This and related topics such as “how to use credit card to your advantage, how to manage investments, and how to manage your debts” are just among the discussions to be presented by Plinske during the seminar next week.
Plinske made a test presentation of his material last Tuesday at the CDA office. Other panelists were in attendance for the dry-run on their respective presentations.
The CDA is set to hold a series of business survival seminars to help local residents and business owners cope with the current economic crisis.
CDA will hold the first seminar on April 24 at Northern Marianas College Rota campus.
The second workshop will be held on Tinian on April 26 at the Tinian Youth Center.
On May 1, CDA will hold the seminar at Fiesta Resort & Spa on Saipan.
All workshops will be held from 8am to 12 noon.
Workshop speakers include NMC Small Business Development Center director Eric Plinske, Energy Division director Thelma Inos, Summer Holiday Hotel's John Camacho, Saipan resident Kraig Church, Workforce Investment Agency lead case manager Lucy Sablan, Department of Labor's Alfred Pangelinan, and CDA's acting chief executive officer Oscar Camacho.
“We want businesses, particularly our clients, to survive this crisis. This seminar aims to help them in managing their business,” said Camacho.
CDA extends commercial and agricultural loans to qualified residents.
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