Tuesday, January 6, 2009
Staying In The Black
How to keep the cash flowing when the economic sky is falling
Every business on the planet is strategizing how to survive this economic downturn. You’re no different. Your existence as a photographer, large or small, is an integral piece of the global economy. Don’t believe me? Think about how many people you paid for services in the last 12 months. I’m talking about more than the obvious, like labs and camera stores. I’m also talking about crew, cafes, bookkeepers. Also think about all the businesses that benefit from you having a semiregular income—restaurants, concert venues, clothing stores, etc. Just because times are challenging doesn’t mean you should sit down. Now, more than ever, is the best time to recruit your creative mind and apply it to your business.
The first step is to verify and secure your credit lines. It’s unlikely that your local businesses will screw with your account at their shops. But going through your vendor list and making sure that you’re not running late with any owed money will go a long way to securing your position. If you’re running late with some of your payments, call the business. I can’t emphasize enough how important communication is. During an economic downturn in 1991, I called two labs that I owed money to and told them I was broke. I sent each lab 50 bucks and told them that, as I received money, they would receive money. Because I was in frequent communication and made a constant effort to pay them back, they kept my accounts open and allowed me to utilize the accounts on a limited basis. It was enough.
Don’t lie. Don’t tell someone you’re going to send a check and then not. Think about how you feel if someone says they’re “for sure, cutting you a check today” and you visit your mailbox 15 times a day only to find out they were full of it. Wouldn’t you rather know it’s not coming so you can work on other plans to cover your bills?
If you have a credit line at a bank or credit cards you depend on to produce your jobs, make sure your credit lines are intact. Banks are utilizing any excuse they can to take those credit lines away. A late payment, even if you’ve never paid late before, will trigger a review of your account and removal of available credit. If your credit line gets diminished for nonuse, call the bank and ask them to reinstate it. Unfortunately, depending on your situation, you’ll be only marginally successful at getting them restored.
The banks are playing a numbers game based on your credit score and your credit-to-debt ratio. The insidious thing is that when a creditor recalls part or all of your credit line, your credit-to-debt ratio increases, but there’s nothing you can do about it except for finding out what sort of credit situation a creditor would like to see to restore your line. Then try to hit that goal.
Clients who owe you money have to be communicated with more diligently. If a client is behind on a payment with you, call them and find out what you can do to help them pay you. If you put it out to them that you’re available to looking at options, it will go a long way to getting some money sooner rather than no money for a long time.
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