Financial Alternatives for Small Businesses
Financing Choices for Small Business Owners
There is nothing simple or easy about running a small business, but there are some practical options for avoiding problems along the way. This overview provides some key examples of financial alternatives for small businesses to consider.
With many of these small business finance choices, suggested actions need to be implemented on a timely basis. Small business owners should be prepared for some difficult decisions along the way.
What about Plan B and firing your banker?
Difficult Financial Choices to Find New Business Solutions - New Financial Alternatives to Consider
For at least some small business owners, the financial alternatives shown below might not be the first or even second or third choice to resolve a current business finance problem. But in the current perplexing business environment, these are realistically financing options that could be necessary to ensure the survival of a business. So while some will view these potential business solutions as a "last resort" to pursue only if all else fails, a more prudent perspective is to consider them sooner rather than later because so many banks are failing to provide a "normal" level of commercial funding to small businesses.
- Business finance consulting can be an effective first line of defense. Increasingly it will be helpful for small businesses to have an objective and independent expert consultant to guide them through uncharted waters.
- Small business cash advances and other non-bank strategies such as receivables factoring for obtaining working capital. Banks have dramatically reduced their programs for providing lines of credit and working capital financing to small businesses.
- Be prepared to fire both your bank and your banker. If the current lender is not providing essential business funding, this option assumes an even higher priority.
- Contingency business planning that will evaluate which financial alternative(s) should be pursued if and when a preferred financing option is not available.
- Reduction of operating expenses for a business. This particularly includes supplier and utility costs.
- Business and financial negotiations to improve financing terms and loan costs.
One Choice: Small Businesses Might Need to Fire Their Banker
This is likely to be an uncomfortable financial alternative for any small business owner to consider. Because there continue to be a high number of troubled banks, the FDIC (Federal Deposit Insurance Corporation) could end up firing your bank for you if you don't do it first. The decision process to fire your bank should place particular emphasis on whether the current bank is providing your business with an adequate amount of working capital financing and commercial real estate loans.
This continues to be one of the single best books about making choices at any level. Practical decision-making is truly a "must have" skill for any individual.
What are my choices again?
Plan B Should Be Fired Up and Ready to Go When You Need It
While I think that having choices and alternatives is always preferable, I do find that some people literally hate making decisions. So there might be such a thing as too many choices for some individuals and business situations. In such cases, having a Plan B already in place can be a comfortable strategy even for someone who does not like making decisions because the choice has already been made to go with Plan B if and when something goes wrong with Plan A.
It is important to remember that practical choices change over time. With the recent high speed of changes in many areas like commercial financing and career planning, the alternatives need to be regularly reviewed and revised as appropriate.
Contingency Business Plans
However difficult it might be, the preferred path is to use business planning that reviews practical and timely business financing alternatives well before the actual need occurs. While I have referred to this as a "Plan B" mentality, it is prudent to have a Plan C, D and E as well.
William Ury: A Yes and No Expert
I particularly emphasize the importance of "No" in several of my articles. I have described William Ury as one of my favorite business authors, and he has become famous for writing the "Yes and No Trilogy" about how to use "No" more effectively. I strongly recommend that you read his three major contributions to the world of yes and no. This is one of them (third in the series). The three books can easily be read separately and in any order.
Yes and No Are Always Key Alternatives
There are some very short words like banks, risk and debt that qualify as key words and concepts deserving special attention by small businesses everywhere. But there are two shorter words (Yes and No) that might be even more critical because they represent two of the most frequent choices available to business owners and managers.
There are many daily examples in which small business owners will be much better off if they can master the use of yes and no. Certainly this includes some more obvious examples like business negotiating and communicating, but it does not end there.
Small Business Finance Opinion Poll - What Do You Think?
Whether you personally need help with small business financing or not, you probably know small business owners who might need more financial alternatives and financing help.
Please pick a choice below that best reflects your opinion about the current state of commercial financing for small businesses.
Small Business Finance Choices and Alternatives Are Meaningless When Ignored
Decisions about Commercial Financing Options
To reiterate some earlier points, the current path to success when seeking small business financing is likely to be difficult. Many of the realistic options will be uncomfortable, but the potential cost of not making difficult choices will frequently be unresolved problems for a small business owner.
Understanding Your Business Writing Alternatives
Small business owners are likely to need business writing help with several of the key business problems described in this overview.
Small business owners might need to fire their bank.
One More Thing - The Right Kind of Planning
Contingency plans and Plan B are often forgotten in the rush to get other important tasks accomplished. In today's chaotic business finance environment, contingency planning is more important than ever. This kind of planning devotes special attention to evaluating what to do when or if something goes wrong. Doesn't that sound like a prudent perspective to take in the current banking and financial climate?
- "Always have a Plan B."
While business planning is widely accepted as a building block for small business growth, contingency planning is a more specialized variation that seems to be overlooked more often than not.
It is our choices... that show what we truly are, far more than our abilities.— J.K. Rowling
© 2012 Stephen Bush