 As
we near the end of the first quarter of 2010, much has already
occurred: An almost unfathomable Republican victory in Massachusetts,
an underdog, first time Super Bowl team defies the odds, and the
Tea Party holds its first convention. National healthcare is now
to be renegotiated, TARP money is to be redirected to provide funds
for small business loans, SBA restrictions are to be loosened and
employers are to be financially incentivized for hiring. All in
all, a fair amount of activity in a short period of time. Not knowing
if and when all these initiatives will be implemented, what are
the prospects for businesses this year?
Needless to say, current cash flow and availability of credit
are critical components at any point in time, but even more so
in this business environment. Although I have observed
some nominal positive signs, the reality for most businesses will
be that 2010 will again be a challenging year.
The availability
of funds notwithstanding, most banks’ underwriting
standards will limit the number of transactions that will be approved.
With the continued uncertainty on the part of many business owners,
many important, and in some instances critical, business decisions
are being deferred or nominally implemented. As to the administration’s
attempts to stimulate the economy, most business owners give little
credence to the purported benefits. This is borne out by various
surveys of small business owners. To cite an example, the Discover
Small Business Watch for February surveyed 750 businesses with
the following being some of their responses:
- 44% see the economy getting worse
- 57% rate the economy as being poor
- 70% said federal stimulus efforts has had no impact
- 17% said federal stimulus efforts hurt their business
- 76% said
they were “not very confident” or “not
at all confident” that the federal
government and congress can address the needs of small business
With restricted credit availability and the above opinions being
the backdrop for many businesses, close attention should
be paid as to formulating a business plan that accounts for these
conditions, while attempting to seize business opportunities as
they arise. Given that improvements in the situation
will likely be slow in coming, business owners need to understand
and interpret how this effects their business and industry and
create a plan that adapts to the new paradigm.
My business
is to work with business owners in formulating
a strategic plan to deal with these issues and enhance the cash
flow that is so critical in their day to day business activities. I
welcome the opportunity to work with any client or prospect where
you deem my services to be appropriate.
Tom Stamborski
(847) 842.3300
tstamborski@liquidcapitalcorp.com
P.S. If you missed my previous e-bulletins, click here to view them. |
While
the day to day challenges of running a business occupy
the thinking of the owner, contemplating and planning
for critical contingencies is no less important.
The premature death or permanent disability of the
owner or the sale of the business to a key employee
are scenarios where an established, viable plan is
mandated. In the absence of this type of planning,
clearly the business is at great risk. 
