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How Can My Small Business Survive in a Changing Economy?

Posted by Jonathan Krems | Nov 28, 2021 | 0 Comments

The month of May is Small Business Month, and so all during this month in the Freedom Friday blog and email newsletter I want to answer questions which will help you succeed as a small business owner.  In today's Freedom Friday blog and email newsletter, I want to answer the question, “How Can My Small Business Survive in a Changing Economy?”  In other words, how can I prepare my small business to be successful in these uncertain times with economic change?  In today's Freedom Friday blog and email newsletter, I am going to share four key areas in which it is vital to prepare your small business to be successful in the future.

1.  Contracts

The first key area in which it is vital to prepare your small business to be successful in the future is your contracts.  Each time you sign a contract, you enter into a legally binding agreement on behalf of your small business.  Unfortunately, contracts may have unfavorable terms, or may not be legally enforceable.  A prospective client once asked me to draft a lease against a defunct entity.  I refused to do so because it wouldn't be enforceable.  Now is the time to review your contracts to ensure that all your contracts for your small business are proper documents and in writing.  Also, your small business should have a written contract in place with every vendor, and this is a particularly good time to review your vendor contracts.  It's also a good time to review any contracts that you're required to make payments on.  If you have any questions about how to interpret your contracts, you should consult with an attorney who can review your contracts and answer your questions about them.

2.  Finances

The second key area in which it is vital to prepare your small business to be successful in the future is your finances.  This is a broad area that requires a lot of attention.  There are three different aspects of your finances which you should focus on as a small business owner.  The first aspect of your finances which is important is your small business's receivables and/or collection issues.  Receivables are monies which are owed to your small business.  This is the time to make sure your clients or other third parties are current on making their payments, and to make sure that receivables on open accounts are not turning into collection issues.  If you have any issues in this area, it's a good idea to talk with an attorney about what solutions might be available.  The second aspect of your finances which is important is your small business's debts.  You need to identify all the debts which are owed by your small business and make it a priority to pay those debts and avoid collection activity or litigation filed against your small business.  If you're having trouble paying your small business's debts, you should consider hiring an attorney who can help you negotiate a repayment plan with your creditors.  The third aspect of your finances which is important is budgeting and cash flow issues.  This is a great time to sit down and look at the rest of the year's finances and consider if you need financial assistance or other strategies to protect your finances for the future.

3.  Succession Planning

The third key area in which it is vital to prepare your small business to be successful in the future is succession planning.  You need to have a business succession plan.  What will happen to your small business if something happens to you as the owner?  There are three parts to solid business succession plan.  The first part of a solid business succession plan is to have buy-sell provisions in your operating agreement or bylaws.  This is especially important if you have more than one owner of your small business, but it's also important if you're the sole owner of your small business.  These provisions will document what will happen with your small business if something happens to you, or if something happens to one of your co-owners.  The buy-sell provisions should address what will happen with your small business in the event of your incapacity, death, or other situations.  There are different options, but its best to consult with an attorney to review those options with you in preparing or revising your small business's operating agreement or bylaws.  The second component of a solid business succession plan is to have key man and essential employee policies.  If you have employees for your small business, it's important to have a policies and procedures manual, or an employee handbook.  As a part of your manual or handbook, your small business should have a “key man” or “essential employee” policy, which identifies a “key man” or “essential employee” in your small business and describe next steps if something happens to him or her.  Again, there are different options, but its best to consult with an attorney to review those options with you.  The third component to a solid business succession plan is to consider purchasing a key man insurance policy.  If you're the sole owner of your small business, you should talk with an insurance agent to see if this would be a good decision for you.  You should also consider purchasing insurance coverage for managers or supervisors in your small business.

4.  Emergency Preparedness

The fourth key area in which it is vital to prepare your small business to be successful in the future is emergency preparedness.  As a small business owner, you need to be prepared for an emergency, and that requires having an emergency plan for your small business.  This plan would allow you to continue business operations in the event of an emergency.  There are several steps to create an emergency plan.  First, you need to assess potential risks to your small business.  Then, you will need to identify alternatives for your communications and operations.  You will also need to identify critical business functions and create a plan to maintain business operations.  If you have employees then you should obtain buy-in from them.  Finally, your emergency plan should be put in writing and become part of training for your employees and staff.

If you are interested in starting a small business anywhere in Oklahoma, or you are interested in taking your small business to the next level, please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/

About the Author

Jonathan Krems

Jonathan is the Founder and Managing Attorney of Liberty Legal Solutions, LLC, a law firm dedicated to building, protecting, and defending the business and personal interests of our clients in Oklahoma.  Jonathan's primary practice areas are business law, contracts and agreements, business liti...

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