Entrepreneurial

Credit crunch forces small businesses to get creative

United National Consumer Suppliers, a Ft. Lauderdale, Florida broker of clothing, toys and other merchandise for discount stores such as Marshalls, has been seeing more suppliers ask to be paid up front amid worries over the uncertain economy.

But that’s not necessarily a bad thing, said CFO Todd Hartstone, who in exchange for complying can often garner deeper pre-payment discounts.

“We’re going to monopolize on that opportunity,” said Hartstone, whose business has been putting up good sales numbers as consumers seek more bargains from discount stores. “Fortunately having a little cash strength puts you in a position where you can drive the purchase.”

During a downturn, successful entrepreneurs work to create their own financing infrastructure by improving trade terms with suppliers and vendors, said Jeff Stibel, CEO of Dun & Bradstreet Credibility Corp, which studies credit ratings of small businesses.

“They’re becoming a proxy for credit and debt,” he said. “What they’re trying to do is build stronger relationships.”

from The Great Debate:

Starting a trade war with “Buy America”

diana-furchtgottroth

–- Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. –-

When Congress inserted “Buy America” protectionist provisions that required some goods (such as steel, cement, and textiles) financed by the stimulus bill to be made in America, our government invited a trade war with important economic partners.  Now China and Canada are imposing their own protectionist regulations, potentially destroying well-paid American jobs in the export sector.  Other countries may follow suit.

This week China reported that the government now requires stimulus projects to use domestic suppliers when possible, even though in February it promised to treat foreign companies equally.  The Chinese $585 billion stimulus package has resulted in a World Bank growth forecast of 7.2% for China this year, far above other industrialized countries.

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