101: Conserving Capital
If there is one sure thing today it’s that we are in uncertain times. And if you have a small business you need to be ready for lean times. One of the ways to prepare for a tough economy is to take a hard look at your business and make smart financial choices that can help you save.
Here are five tips from SCORE (Service Corps of Retired Executives) on how to conserve capital.
1. Determine your primary business of units sold, customers sold, average order, hours billed, etc. Know what drives your business.
2. Pricing should be determined by the sum of product costs, service costs, image of the business, direct and indirect costs and a reasonable profit.
3. Do not commit cash or capital until necessary. Don’t buy services before you need them.
4. Lease instead of buy when it makes sense.
5. Look for office equipment that can do double duty, for example a fax machine that can also make copies.
Source: SCORE, www.score.org.
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