In these economic times, it's important to remember that "Cash is King!" Do you have a good idea on how to preserve cash? How do you make your money last longer? Share your tips and tricks with others. Send your suggestions to mobiblog@myownbusiness.org. We will be accumulating your suggestions and posting them in a special area of our website.

Here's one of our favorites... If you use a company credit card to make purchases, be aware of the billing "cut off" date. Any time you have to make a significant purchase, do it just after the cut off date. This can give you 20-30 extra days before you have to pay without a finance charge on an unpaid balance.

Another one: If you're like an increasing number of small businesses, it's taking longer to collect your money. Aging of receivables may be approaching 60 days - or more. Consider an incentive. If you don't already, offer your customers a discount if they pay in full within 10 days.

If your sales are dropping, you need to consider every possible way to promptly reduce expenses. Here are some possible scenarios concerning rent costs.

• Contact your landlord before you're delinquent. Disclose your cash flow projection (See Session 8 at www.myownbusiness.org.) to show you need a rent reduction to maintain liquidity. Your lawyer can help work out repayment terms or suggest other options depending on the severity of your circumstances. Your landlord's alternatives are limited--accept a lower rent or be faced with a vacant space.
• Could another complementary tenant share your space and rent?

• Shop rent costs. Some landlords are more flexible than others.
• Ask the landlord to provide the tenant improvements.
• Restrict your initial lease term to 1 year with options to extend.
• Ask for free rent, such as the last 1-3 months of a 12 month lease.
• Don't compromise on location.

• Begin a marketing campaign to lease the premises to a sub-tenant.
• Offer the landlord a reasonable buy-out of the lease. Your lawyer can help negotiate terms.

Q. What are the major mistakes small business owners make in managing their cash flows?

A. The worst mistake is not maintaining up-to-date cash flow projections so that future liquidity is maintained. So start now to begin preparing monthly cash flow projections that reflect your best estimates of lower future sales.

Another mistake is not lining up sources of cash well before a liquidity crisis is forecast.

Q. What are some other measures that I can implement now to protect myself in these tough economic times?

Modify either your product or service so as to offer your customers more high-value, low-cost items. For example, if you have a wine shop, consider focusing on highly rated wine that retails for $5 a bottle or less. Walmart does exceptionally well in difficult times by following that practice.

If you have a retail business, do you really need to be open at 9 am or after 5pm? Can you cut hours or put some people on 4-day work weeks? Be creative.

Q. What administrative functions do you suggest a small business owner outsource to save time and money?

A. The first thing you should outsource is payroll. It is too complicated to do yourself and the potential for making a mistake is high. A payroll service provider will handle the checks, deductions and reporting. They will also provide the end of year W-2 forms.

If you have an office-based business, you might consider using an "office suites" firm that can provide an office and central reception, conference area, and other support services. Some facilities can also provide a full suite of telecommunication services.

Q. If I have a steady and profitable revenue stream, should I really be concerned about my cash flow?

A. The answer is always YES. Making money is not the same as maintaining positive cash flow. It's possible to be earning money and still go broke. For example: if you begin selling a product that your customer can pay for over time (not using a credit card) and you have to pay your supplier within 30 days, you will run out of cash real fast.

We welcome your questions to be answered in this Newsletter feature! Here is our Q and A for this edition:

• Many fast food shops continue to do well. In October 2008, McDonald's same-store sales rose 8.2%. People will buy a doughnut and coffee rather than steak and eggs for breakfast. Krispy Kreme Doughnuts was started in the great depression of the 1930's.
• People are shopping more on the Internet. With minimum risk and investment, think about starting a web-based business specializing in a single product or service. The "local" feature of search engines will bring business directly into your home-office.
• The best time to by stocks, real estate, or a business is when everyone is fearful. Are there good businesses at fire-sale prices in your community? For valuable tips on how to buy, see session 11 "Buying a Business or Franchise" at www.myownbusiness.org.