NMI gets help from business expert

Being home to thousands of small establishments that have suffered painful bruises from the Asian economic contraction, Northern Marianas yesterday received doses of urgently needed medication from a United States-based business expert.

Douglas Hammel talked about survival mechanisms that may be adopted by small businesses in the CNMI during hard economic times in a workshop sponsored by the Northern Marianas College-Business Development Center and the Saipan Chamber of Commerce.

According to Mr. Hammel, economically-disadvantaged businesses that are struggling to remain afloat should attack the most pressing issues first as he laid down a sequence of problem-solving techniques that would properly treat financial ailments.

Specifically, the business expert suggested that distressed investors and entrepreneurs promptly control finances, improve efficiency and re-focus marketing in order to address prevailing cash crisis.

Mr. Hammel, also known as the Business Doctor, underscored the value of time management and proper identification of who are good and who are bad customers.

It is important that companies begin collection the soonest possible time, the business doctor said, adding that any outstanding collectibles past the 90-day period threatens possibility of recovery.

During hard economic times when being able to recover money from customers prove to be more difficult, he also offered subtle ways of being able to secure the outstanding collectibles from derelict customers:

Mr. Hammel also appeared to be a non-bargain believer as he urged small business owners to charge extra for emergency service or choose higher profit margin jobs while advising them to negotiate for reduction in space rental fees.

However, he mentioned the importance of lowering costs in the elimination of unprofitable products and services, non-value-added activities, and in the consolidation or expansion of suppliers.

Mobile phones and pagers are a no-no to Mr. Hammel, pointing out that these communication gadgets would only increase operational costs offering too little help in the progress of any struggling business.

And what could be the better way to get a commanding control of finances than by being able to read accounting books and financial statements. “Don’t expect bookkeepers or accountants to do it for you,” he said.

Mr. Hammel recommended that small business operators understand pricing methods by comparing mark-up prices and margins to identify the profitability of certain items or services.

He developed his Business 911 strategies to help businesses keep their investments from failing. Business 911 also leads business owners step by step to the long-term planning that will keep the investments healthy.

Mr. Hammel said small business owners are not alone in finding themselves in an unprofitable situation. “It might be comforting to know that big business managers make exactly the same mistakes small business managers make.”

He added that businesses may also have to take painful cut in operational costs by reducing the number of employees which should come from process redesign and determining whether everyone is busy on profit-creating work.

In most cases, Mr. Hammel said those who are not so busy should be served their walking papers first.