Enterprising Women Vol 10, No 2, 2009

Lessons are best learned about yourself as a manager and a leader during tough times. In these economic times, it is more critical than ever for a business owner to re-visit her business plan, customer base, day-to-day operations, and balance sheet, and to look at them in the context of how her business is impacted by the current business and credit environment. Consider the following: • Assess the amount of borrowing and the amount of credit pro- vided to customers. • Focus on cash flow and profitability, and strive to reduce debt and accumulate cash. • Be mentally and financially prepared for a volatile 12 to 18 months • Be flexible and make tough decisions when necessary Business owners need to be realistic and proactive to position themselves in the best way possible to meet the challenges that this environment presents. While there is little doubt that credit is tightening, funding should continue to be available to profitable businesses with good credit and strong balance sheet support in stable industries. However, despite their positive financial attributes, some businesses in industries that have been the hardest hit are undergoing additional scrutiny. The businesses that will feel this backlash more drasti- cally than others include start-ups, restaurants, consumer-good retailers, and any business that is only marginally profitable. Some businesses are being “credit squeezed” because of who they sell to. For example, a smaller business whose model is based on selling to large retailers will likely succeed or fail in concert with the large retailer. A strong banking relationship can be critical during these turbu- lent times. Open and frequent communication with a banker who understands her business and the business environment can be the source of valuable information, guidance, and service. Facing Challenges Ahead What You Should Know About Today’s Economic Environment and How the Right Bank Can Help Not all banks are the same. Should you bank with a small bank or a large one? BY TEOFLA RICH T he deteriorating eco- nomic environment, coupled with the cur- rent financial crisis, has cre- ated obstacles for business- es beyond anything we have seen in recent history. Credit is less available and more expen- sive, the business landscape is changing, and “doing business” is more challenging than ever before. However, every challenge presents an opportunity, and no one has a better perspective than women business owners. Women-owned businesses con- tinue to be the fastest-growing segment of entrepreneurship in the country and a mighty force in the business community. enterprising Women 31

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