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WISE MANAGEMENT OF CAPITAL IS KEY TO BUSINESS SURVIVAL

 NEW YORK, March 16 /PRNewswire/ -- According to the U.S. Small Business Administration (SBA), more than 50 percent of all businesses fail in their first four years. The reason is often cash flow -- depleting initial capital before collecting the income generated from business activity. Sales can be strong, but if inventory gets too high or customers stretch out payments on invoices for services, the company will soon be in trouble.
 Experts say a combination of wise capital management and strategic thinking can help improve a company's success rate. Here are some tactics:
 -- Have a financial plan as well as a business plan. Write a financial plan that will help concentrate on the essentials of cash and credit management. Analyze cash and credit requirements over five years. Determine how and where growth in sales, personnel and space will affect cash flow. By developing a long-range plan, it will be possible to address the essential, specific needs of the company in the coming year, not just this month.
 -- Plan to tightly control cash. Pay slow; collect fast. Insist on short terms with customers. Buy time by accelerating receivables and stretching out payables.
 -- Lease instead of buying -- not only equipment, such as copiers, computers, a telephone system and office space, but office furnishings as well. Rental furniture can provide an affordable quality image, even when a company is just starting up.
 Renting office furniture is often a better option than purchasing. No down payment is required upfront, so cash is saved. Rental fees are treated as direct monthly operating expenses. This frees companies from annual IRS depreciation schedules, and payments are usually tax deductible.
 -- Consider part-time or temporary workers. Once full-time staff is hired, an employer assumes ongoing responsibility for its monthly stipend plus full employee benefits -- including severance, if the workers eventually have to be laid off. Utilizing temporary workers gives employers the flexibility to conserve cash when the workload dips. The quick delivery and set-up options of furniture rentals ideally accommodate this growing labor segment.
 -- Plan for growth. Growth, even in tough economic times, is important for a business' survival. Recent U.S. Small Business Administration (SBA) statistics indicate that small businesses' chances of making it are more than 250 percent higher if they add even one employee during their first two years. If a business owner has analyzed capital needs and assessed the impact of adding additional employees' salaries, growth can be opted for at any time, as business dictates.
 -- Don't cut corners for short-term gain. Make decisions that allow for change. Lease office space with an option to expand at the same rate. Sign furniture rental agreements that include buy-out options, so rental payments can be applied toward an outright purchase, when the business does make it. Terminating a rental contract is much less costly than liquidating or selling.
 For more information about how furniture rental can help business not only be survivors, but winners, contact the Furniture Rental Association of America (FRAA) at 614-895-1273.
 -0- 3/16/93
 /NOTE TO EDITORS: Rental association members from coast-to-coast are available for interviews./
 /CONTACT: Rick Rhoades or Laura Barnoski of The Bohle Co., 310-785-0515, for The Furniture Rental Association of America/


CO: Furniture Rental Association of America ST: New York IN: SU:

SM -- NYSFNS4 -- 6344 03/16/93 07:04 EST
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Publication:PR Newswire
Date:Mar 16, 1993
Words:550
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