SourcePoint. Business Group Serving the Greater Toronto Area with Nine Offices NEWSLETTER – Summer 2009 Edition Covering Aspects of Security & Liability for Personal and Business Property and Business Operations of the Owner. Interest Expenses/Refinancing: How long has it been since you renewed your mortgage? If you are in your last 24 months, many institutions will allow you to refinance your mortgage. You end up with a blended rate and can extend the terms ex: to four or five years. If you like a little more risk, you can save a lot more interest by going to a prime-rate based mortgage as well. If you have corporate loans, you can also enquire about refinance options. Some penalties may apply but this may be offset by interest savings. Every case is different so it never hurts to ask. Avoid credit card interest at all cost as it is a no win scenario at those rates. If you have strong financials, it may be a good time to increase your line of credit. Accounts Receivable Be diligent in collections! Be very diligent in collections! As soon as some customers are not paying you, that is a warning bell. You will hear every excuse in the book but remember it is not a sale until it is collected. Many customers will avoid paying you if you do not ask. They are paying someone so do not be afraid to push for your payment as well. With respect to credit, you also need to be careful. It is nice to report increasing sales but you need to ask yourself why only in recent months is that customer coming to you? Perhaps they had their credit reduced or cancelled by someone else. Do your homework and you will have a lot less pain later. Vehicles/Automobiles: In these very tight times, it is hard to imagine that getting a newer vehicle can be beneficial. Interest rates at certain dealers are very low, warranties are much better and longer and prices are very negotiable. For example, if it is just before your year end, and it is a purchase, you can get a GST input credit and a quicker write-off compared to purchasing the month after your year end. If you are looking at major repairs or vehicles are very old, perhaps worry free driving for a few years is important to the success of your business. No one knows for sure how long these deals will be around. Work Sharing (Service Canada) The government of Canada has a plan that can allow your workforce to work on reduced hours and have your staff collect EI on the fourth or fifth day for example if this is a temporary condition. The program was designed to allow an employer to keep good staff in this recession. This program only works if all employees consent to putting it in place and under work sharing, they will have a reduced pay. I have provided a link so please check it out to see if you can work for you. http://www.servicecanada.gc.ca/eng/work_sharing/index.shtml Sales: What a great opportunity in this recession to get new sales. Some companies are no longer in business and that is unfortunate but the aggressive owners are out there hustling for new business and looking for new angles to get sales. Start sending those emails, faxes, posting internet ads about your new products or services. Try knocking on a few doors and making some phone calls. Get involved with a networking group that meets once a week. You might find out about other businesses that need your services. Drive around your area and look for new businesses. Rule number one, your marketing and advertising budgets should be the last to cut as these dollars generate sales. If you must cut, review which program gets you the most business. Those that come out of this recession in a strong position will do very well in the recovery years.