Dear Karen: I need better cash flow. Any tips?
Answer: Review your product inventory. Most companies stock items that are not selling or selling too slowly, said Sheldon Kopin, a consultant at JBS Associates in Cincinnati.
"If possible, return these items to your supplier for credit, or exchange them for better-selling products," he said. If you can't, sell them at a discount and don't reorder.
Another way to improve cash flow is to pay down outstanding debt, Kopin said. And use the money you save on interest to establish a reserve fund that will help stabilize your company in the next downturn.
Reallocate assets to aid nest egg
Dear Karen: I consider my business to be my retirement account. Is this too risky?
Answer: Business owners whose companies represent a major portion of their nest egg should reduce their risk by reallocating their assets, said Carlos H. Lowenberg Jr., founder of Lowenberg Wealth Management in Austin, Texas.
Unless you're very close to retirement, divide your money into thirds.
Put one-third into higher-risk ventures such as your business and real estate investments, one-third into safe investments (bank CDs and savings accounts) and one-third into securities (mutual funds, stocks and bonds).
If you need cash, talk to an advisor about extracting it from your company. Some strategies: Take on new business debt, bring in a private equity investor, or consider an employee stock ownership plan.
Keeping tabs on payroll taxes
Dear Karen: How can I avoid problems when filing payroll taxes?
Answer: Small-business owners frequently get dinged for incorrect or late payroll tax filings, said Michael Alter, president of SurePayroll, an Internet payroll service in Glenview, Ill.
Keep track of deadlines for paying payroll taxes and filing your payroll tax returns.
Details and resources are listed on SurePayroll's website, www.surepayroll.com. Click on "Small Business Resources" and then on "payroll by state."
Questions? Write to Karen at inbox.business@latimes .com or In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.