LEFT OF CENTRE: Credit is prince
THE ISSUE: Is now the best time for businesses to seek credit?
“CASH?IS?KING!” These words from Bob Holland Jr of Ben & Jerry’s fame burrowed into my head as Holland delivered the third annual Leo Leacock Memorial Lecture during the Barbados Small Business Association Week of activities back in September.
Yes, I agree “cash is king”, yet I believe that “credit” would have to be second in line to the throne in this financial monarchy; hence, “credit is prince”.
As “king cash” slumbers far too long, there remain critical functions to be done, therefore “prince credit” has to execute those duties. Let us all hail the prince!
While many continue to be challenged by the present state of affairs in the global economy, many are waiting for the new tide of economic prosperity to come in.
Accessing credit now provides a valuable resource to navigate these treacherous periods while enhancing our business vessels to maximise the opportunities that will come with the next wave of prosperity.
I have no doubt that financial experts will identify, calculate and highlight the financial benefits and risks associated with accessing credit. As an entrepreneur I’m forced to look beyond the shadows of the initial number crunching and cast my eye on the mountaintop where I aspire to be.
Here are five reason why now is the best time to access credit.
• Using the resources of others (conditionally) elevates our commitment and personal obligation to produce efficiently. As entrepreneurs, lack of accountability is often our greatest obstacle to producing results and attaining goals.
• Maintain the customer experience. Lack of cash has resulted in downscaled operations and slashed budgets. The major casualties have been marketing and customer service training. This is very unfortunate since the present environment allows those who truly embrace customer service excellence to leap ahead of their less customer-focused competitors.
• Research and development. If our companies are to survive and emerge more competitive, then ongoing development and innovation is going to be paramount. Having a positive attitude and taking the relevant actions to explore new markets, product development and much needed service innovation contribute to the paradigm shift required for economic growth at all levels of business.
• Building relationships. I was once told it was easier to access credit when you don’t need it. Hence, accessing credit now provides access to the proverbial “shelter for a rainy day”. In practice, I have found that mutually beneficial relationships diminish the risk associated with credit. After all, partnership in its widest context provides the platform for growth and development.
• Credit facilities are undersubscribed. Our culture of business encourages us to use our own capital, hence undersubscribed credit facilities can provide opportunities to access credit with more favourable terms and conditions, especially for those with the ability and means to negotiate effectively.
The bottom line is that credit has a vital role to play in stabilising and enhancing every business endeavour. While many will continue to turn to credit as a final resort to stay afloat, the key element is this: all credit facilities should be used creatively and strategically.
Troy Holder is a marketer, designer and trainer at Q’Designs & Marketing.