As our economy limps forward with stubbornly higher than predicted unemployment rates, temporary staffing remains one of the few industries that offer a sliver of good news. 

Temporary staffing numbers have grown steadily this year, according to an American Staffing Association report released last week. It says growth has been steady; hiring is 33% higher than the first week of 2010 and 24% higher than the same weekly period in 2009.

If the Fed can get the economy moving, staffing will probably see an even more dramatic uptick as companies scramble to fill positions. Turning to temporary staffing companies is a smart move for U.S. small businesses right now. It gives them a way to add some needed extra hands until they feel more secure about the future.

 
I encourage those who have given up on their job search or have skipped the temporary worker avenue in pursuit of full-time employment to think again – especially now, when our recent experience shows the timing is right. In this competitive job market, reaching out to a staffing company that can help you get your foot in the door to a reputable employer is a very savvy first step to take.

Pledges are being made by banks to lend more in 2010, but I suspect small business owners will join the ranks of consumers (who have had these same banks pull their credit card lines and increase monthly minimum payments) in the “once bitten, twice shy” brigade.

Commercial finance companies, like the factoring business I work for (Bibby Financial Services) have spent the last six months stepping up to the plate and working with small businesses to help them get it done. This is the same throughout the factoring industry.

I suspect many a businesses owner’s New Year’s resolution will be to never be beholden to a bank again. Their behaviors cannot be predicted or, maybe one could say, they can be too easily predicted……

1.  Coming in first: “The check signers are on vacation/out of the office.” At 34%, the classic time buyer is still going strong.

2.  A close second, at 32%, blamed it on the mailman. “It’s in the mail” remains timeless.

3.  Coming in third with 14%, is the more current, and probably truthful excuse: Deflection. Blaming it on the bank.

Talking to our own clients we see the same trends. Although, in recent months, we have seen a 10%-plus reduction in the average number of days outstanding for the receivables we manage. A bit of “strong arming” you may think. But no, it’s based on these tips, which can help make sure you are top of the list when it comes to getting paid:

1.  Get them the invoice on time. No-one can approve or pay what they don’t have.

2.  A light and breezy early call. Just touch base to check with your client’s accounts payable team to confirm they have received the invoice and have what they need. Keep it conversational and quick. The “mislaid” invoice excuses will start to fall away.

3.  Shortly before the invoice is due, put in a follow-up call, again with a light touch. Check to see that they have what they need to pay and whether things are looking good for payment. It’s hard to use the “no-one’s in to sign” excuse when they have already told you it’s all set for Friday.

4.  It’s all about a routine. You will get to know the payment clerks and they will expect your call. You will also get to sense a change in tone when an excuse comes, as it’s harder to brush off someone you have got to know. For those clients who can pay, you will get your client “trained” to get your check into the run regularly.

Expecting some tips about “setting the collection dogs” on debtors? Nope. If your client can pay, and you don’t want to hear one of the top three excuses, these simple tips will help keep your cash flowing.

Any excuses you think should be on the top three or any tips for keeping the cash flowing? Love to hear them.

Scraping my memory back to the joyous days of economics classes and the wonders of “propensities to spend” and other snooze inducing words, I do recall one bedrock principle. Anglo-Saxons either side of the pond like to spend money, preferably money we don’t have and may never have. This wonderful philosophy has fueled our economies for decades. Is this the start of a new leaning towards saving, or us all getting our individual houses in order?

For the small business sector this is a flag on play as many provide services to consumers or to business clients themselves serving the consumer. One way or another what we collectively spend ties into what we can earn. This should be an area to watch; ultimately, I think once born a spender it is hard to give up and this is our way of waiting for the signs of better times. I would be interested in your thoughts.

Your first call would naturally be to your bank. But banks can be slow as molasses, your line of credit may already be capped, or they can just say no if your credit rating isn’t top notch. Most businesses stop there. Unnecessarily.

I see this all the time — growing companies walking away from opportunity. This is one of the times when accounts receivables financing becomes a viable alternative. The cost of doing business with a factor can more than pay for itself, while you simultaneously improve your bottom line and grow market share.

Think about that before you say automatically say ‘no’ next time. Shouldn’t you do everything you can to put you in position to grow as the economic recovery begins?

Be vigilant in selecting the right financing choice at every stage of your business cycle. You can help yourself immeasurably by remembering that the financing option you picked when you started your business may not be the right choice as you grow.

Small business owners basically have three choices for working capital finance: Banks, credit cards and factoring.

Credit cards are the most convenient — if you can find a company these days that wants to increase your limit. You pay for the goods when they’re ordered, cash flow is predictable. If your customers pay promptly, you pay off the balance each month and your cash position is solid, a credit card works for you.

But as your business grows, inevitably, not every customer pays on time, and credit card limits can be reduced without notice.  A bank loan becomes your affordable choice, if your cash flow is predictable and you can easily cover the costs of doing business. Bank loans are becoming like panning for gold as many banks apply stricter criteria than previously.

But what if you hit a bigger bump in the road? This is when the flexibility of factoring can work for you. It addresses the cash gap directly and affordably. It can also help companies respond quickly as the economy improves.

Remember, factoring is based on the value of the receivables and not on your own or your business’s credit score, so it can be an especially important form of financing for new or growing companies. Factors can also take responsibility for collections and other nuisance administrative chores.