Think Collaborative, Think Creative In Order to Survive.

Even in a robust economy, entrepreneurs struggle to obtain adequate financing to start and grow small businesses. More so today, the current recession has made accessing conventional financing nearly impossible. Excessive collateral beyond project assets isn’t enough to woo traditional lenders. Cash flow is and always will remain king. Bottom line: In these tough times, even the most qualified businesses are struggling to secure adequate capital.

As an economic development professional with expertise in small business lending, I have a few points and questions to ponder for entrepreneurs trying to ride this wave of economic uncertainty known as a recession. Here goes:

• If you don’t manage the crisis, the crisis will manage you. Don’t run! Don’t hide! Some of the largest problems you think you have, become smaller the moment you take the initiative to face them head-on.

• Improvise and break out of the box! Diversify! Think unconventionally! Now is the time for creativity and innovation, not just to cut costs but also to stand out from the crowd in your industry.

• Be honest with employees and make concessions. Sometimes solutions come from asking your employees to think creatively as well. Working together as a team is critical for survival.

• Bend over backwards to maintain good banking relationships. Honesty is the best policy.

• Exhaust all possibilities to improve cash flow! Decisions to reduce staff hours or eliminate all but the most critical operating expenses have likely been made. If you’re down to a bare bones budget, try capitalizing on old opportunities you bypassed last year because the status quo was working so well.

• Embrace those aging receivables and payables that are growing older and older each day. Manage them by trying to negotiate terms with your clients and suppliers to give relief to both of you.

• Business owners are sometimes very lonely people. Talk to colleagues in the industry. Share concerns and ideas. Create more collaboration.

• Solicit suggestions from mentors and advisors.

• Build intellectual capacity. Read industry periodicals. Learn about successful practices employed by businesses similar to yours.

• Lenders fund strategies, not crisis! Revisit your strategic business plan. If you don’t have one, SHAME ON YOU! Get busy with a SWOT (strengths, weaknesses, opportunities and threats) analysis. Develop realistic projections. An SBA loan is still a possibility if your plan demonstrates long term viability.

• Oh! I didn’t forget about businesses in the start-up phase. Prevent poor production by planning properly. Revisit your personal limitations and fill capacity gaps with a well rounded team. Know your market! Understand the competition! Make sure you are serving an un-served or underserved niche. Develop projections. Scrub them! Go for it!

• Finally, please remember that banks are businesses, too! They just have many big brothers (regulators and shareholders alike) watching their every move to protect my money and yours from poor lending decisions.

For nearly three decades, Tulsa Economic Development Corporation (TEDC) has helped Oklahomans create economic opportunity. TEDC is a certified Community Development Financial Institution that uses public and private funds to make small business loans with the ultimate objective of sparking and supporting sustained economic development.

The organization places special emphasis on job creation and in assisting individuals who face multiple barriers to economic opportunity. As a Certified Development Company of the U.S. Small Business Administration, TEDC structures, facilitates and services multi-million dollar real estate transactions for the benefit of local small businesses that are creating jobs in order to grow a sustainable economy.