We are noticing an increase in the length of time it takes Large corporations to pay on their invoices to our team. Fortune 500s are tending to pay their vendors more slowly, which will hurt the already strapped small businesses in America. These same small businesses employ 2/3 the population and do a great service in supplying the needs of corporations.
At the company I run, The Car Wash Guys, has retail and fleet customers. Retail pay cash, which tends to offset the problems with the extended late payments from fleet accounts. It appears that the corporations are conserving their cash to keep earning up until the next quarter, however this will hurt their long term efforts in that the small businesses who provided real time services and parts will not be able to meet the real time demand and therefore cause cost overruns for the Manufacturing sectors. Therefore decreasing productivity and causing a problem with their efficiency efforts. Who will be hurt worst? Likely high tech non able to perform on time for their industries, and their stockholders in decreased valuations of stocks, which do not hit their earnings guestimatation or quotas. Also hurt will be the retail outlets who need items in the store on time to meet consumer demand. The biggest hurt in the long haul will be all of us in America due to increased small business failures of those operating on a shoe string.
Some of these weak small businesses should be weeded out thru abnormal free market factors such as this slow pay and others who are just working to hit ROIs and pay off loans will be hurt. This hurts interest rates because risk adverse banks stop lending to small businesses. It hurts SBA guaranteed loan programs and that affects all of us. It is serious and will most likely lead to unnecessary laying off of people who make up the largest percentage of American working people. Small businesses represent 2/3 of all American Workers. It think this problem will get worse as CFO look for ways to keep cash as long as possible, by stringing out their receivables. Phone companies, electric companies and other bills must be paid on time by the small businesses, whereas theses companies are notorious for slow pay in tough economic times. It seems to be the little guy who gets it in the shorts, such is life and an acceptable given, yet it also effects us as our customer base is decreasing.
What about the labor and layoffs? As small businesses are unable to employ the lion share of the masses, there will be fewer with money to spend on those items sold by larger corporations.
How does this occur and how are small businesses losing? Slow pay means slow payment of bills and adverse credit scores. Also the 60 days of cash flow in the bank will be used in the float. That float some small businesses can absorb, but some small businesses will be beaten down and become inefficient and cannot last that 60 days and neither can most of the nearly 28 million small businesses in this country that pay their bills, buy products and services and feed the families of their workers.
This is the most serious problem facing the US economy and it is still moving in the wrong direction as of first quarter 2001. This is not good. Historically Car Washing tracks the new car sales markets, so our particular company should be fine. Also as any small business will tell you they must be constantly adapting their methods of operations to those forces, which might be a threat.
"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.worldthinktank.net/wttbbs
rental limo Atlanta .. Lockport Chicago limo O’HareOne of the most common horrific mistakes a business can... Read More
Many small business startups fail within the first 2 years... Read More
We all know that competition is an ugly word but... Read More
The FTC- Mighty Federal Trade Commission has unilaterally decided to... Read More
Most small business owners are faced with so many responsibilities... Read More
When you go into business for yourself, there are many... Read More
Business Process Automation or BPA for short. This was a... Read More
You only have so much time in a day right?So... Read More
KEEPING INTEREST HIGH: Supervision is key to the success of... Read More
Just a few years ago, when one thought of a... Read More
Would it help you as a real estate investor to... Read More
Why does a good business relationship rely on having some... Read More
Under the Securities Act of 1933, any offer to sell... Read More
If you're an entrepreneur responsible for your own small business... Read More
As an Investment Representative you've worked hard to build trust... Read More
One of the best ways to make money in the... Read More
Q: I really want to start my own business, but... Read More
Many self employed professionals find themselves overwhelmed, frustrated, and confused... Read More
Do you own a franchised business? Over 400,000 franchised businesses... Read More
In today's economic climate, the first priority for the small... Read More
A cherished business doctrine is that growth must be a... Read More
There is much competition in the mobile auto detailing business.... Read More
A Mattress Cleaning Business might be just for you if... Read More
If you own a mobile truck washing, pressure washing or... Read More
First, we need to define the different kinds of skip... Read More
Bedford Park taxi to Midway ..We all know that a building has to have a... Read More
I agree that knowledge should be free, but the next... Read More
Is it right for you?If you decide to advertise your... Read More
Have you ever wondered what the difference is between a... Read More
With the massive explosion of start-ups and home businesses developing,... Read More
As you may already know, asphalt paved parking lots do... Read More
You've been meaning to tend to the administration part of... Read More
It's a strange anomaly.Most people who set out to start... Read More
BioTechs even with the latest news had shed over 1000... Read More
In the first part of this article I put forward... Read More
The air in my client's office nearly crackled with her... Read More
The Federal Trade Commission out of the blue decide in... Read More
If you're anything like me then you dislike with a... Read More
Whether it has been thrust upon you by external market... Read More
Do you know what your genius work is? It's the... Read More
What image do you and your people portray to your... Read More
There are many little details that go into making sure... Read More
Many smaller businesses choose niche markets for various reasons and... Read More
Q: After years of dreaming about starting my own business,... Read More
While driving through Pennsylvania farmland, you have probably noticed an... Read More
If you own a mobile car washing, pressure washing or... Read More
Do you like animals? Would you like to work for... Read More
The resume writing service serves an important role in the... Read More
Starting the blind cleaning business is one of the best... Read More
Over the years I heard the best way to learn... Read More
Small Business |