The New York Times ran an article yesterday “With Stimulus Package, the Big Winner Could Be Small Business”, which discussed how the government’s tax cuts could help small business more than any other economic sector.
There is so much conjecture out there about how to weather this economic downturn. Some advocate the retreat/retrench approach as the future is uncertain. Others advocate the spend, spend, spend approach because the economic stimulus package will benefit your company in the long run.
THE REAL WORLD RETAILING TAKEAWAY
Be proactive. Successful business owners are aware of their opportunities and are in a constant state of evaluation.
A looming economic crisis doesn’t mean you close the shutters and wait for the storm to pass. It means you prepare – you figure out your plan of action. If the storm hits, you take a specific action based on your plan. And then you have to be in a constant state of evaluation to plot your next move based on the direction the storm is moving, how close it’s hitting to home, the severity of it and more. While we aren’t always able to predict these things, being prepared will go a long way toward your business making it through unscathed (or only with minor injuries).
You owe it to yourself to meet with your accountant or tax expert to find out if the stimulus package can benefit your business through the substantial tax breaks it offers small businesses.
For instance, depreciation expenses are a huge opportunity as 50% of the depreciation write-off can be taken this year for equipment purchased this year. That’s a potentially huge tax write off that just begs small business to spend on equipment. And that’s what the government is counting on to propel the economy of out the slump.
Find out more about how the stimulus package can help you. Then make informed decisions based on the current financial state of your business as well as its needs. Don’t leverage your business if you are carrying a lot of debt and don’t have cash reserves to make it through this downturn. That simply doesn’t make sense. You’ll find your doors unintentionally shuttered (by your bank) because you couldn’t cover your costs. But if your debt load is low and you have some cash on hand as well, it might make sense.
Your financial services providers can help guide you toward what’s right for your business. It’s up to you to use that information to create your plan of action for weathering the storm.