Downturn's Effect on Small Business
In These Times...
Galley Proof
Oct. 20, 2008

“For small business owners whose firms are suffering — or whose loans have been called — times may be tough for a while,” Karen E. Klein, Business Week’s SmartAnswer columnist, wrote Oct. 10. Howard Anderson, a long-time entrepreneur and management professor at Massachusetts Institute of Technology’s Sloan School of Management, says those entrepreneurs may need to live by an old New England adage: “Use it up, wear it out, make it do, or do without.”

Small businesses, squeezed all year between rising expenses and reduced demand, are likely to be the first to cut employees and cease growth — sometimes foolishly. “We often take it in the chops when our bigger customers delay their payments,” Anderson notes. “At times like these, the most important person in your company is your credit manager. And if you don’t have one, you’ve got to become one yourself.”

Entrepreneurs are most likely to sleep well when no single client represents more than 10 percent of their business, Anderson says, adding: “If one of your big clients catches cold, you could get pneumonia and die.” In these tough economic times, we hope our members aren’t losing too much sleep over delayed payments from big clients. If you need credit management assistance, contact Andrea Schlack at the Printing Industry Credit Bureau at 847-265-0400 or .