We are noticing an increase in the time it takes large corporations to pay their bills to our team. Fortune 500 companies tend to pay their suppliers more slowly, which will hurt small businesses in the United States, which are already tied up. These same small businesses employ 2/3 of the population and do a great service by serving the needs of corporations.
At the company I run, The Car Wash Guys, he has retail and fleet clients. Retailers pay cash, which tends to offset problems with long-term late payments from fleet accounts. It looks like corporations are conserving their cash to keep earning until next quarter, however this will hurt their efforts in the long run in that the small businesses that provided real-time service and parts will not be able to meet real-time demand. and, therefore, cause cost overruns for the Manufacturing sectors. Thus, decreasing productivity and causing a problem with your efficiency efforts. Who will get hurt the most? High-tech may not be able to perform in time for its industries and its shareholders at reduced stock valuations, which fall short of their earnings or quota estimates. Retail outlets that need items in store in time to meet consumer demand will also be affected. The greatest long-term damage will be to all of us in America due to the increase in small business bankruptcies of those that operate on a shoestring.
Some of these weak small businesses should be eliminated through freak free market factors like this slow payout, and some that are just working to achieve ROI and repay loans will be hurt. This hurts interest rates because risk-averse banks stop lending to small businesses. It hurts the SBA’s guaranteed loan programs and it affects us all. It is serious and will most likely lead to the unnecessary layoff of people who make up the largest percentage of American workers. Small businesses represent 2/3 of all American workers. He thinks this problem will get worse as the CFO looks for ways to hold cash as long as possible while limiting his receivables. Small businesses must pay phone companies, electric companies and other bills on time, while these companies are notorious for paying slowly in tough economic times. It seems to be the little one who gets it in the shorts, that’s life and that’s an acceptable fact, but it affects us as well as our customer base is dwindling.
What about work and layoffs? Since small businesses cannot employ the bulk of the masses, there will be less with money to spend on the items sold by the larger corporations.
How does this happen and how are small businesses losing out? Slow pay means slow bill pay and bad credit scores. The 60 days of cash flow in the bank will also be used in the float. That float can be absorbed by a few small businesses, but some small businesses will get hit and become inefficient and can’t last those 60 days and neither can most of the nearly 28 million small businesses in this country who pay their bills, buy products and services. and they feed. the families of their workers.
This is the most serious problem facing the US economy and it is still moving in the wrong direction since the first quarter of 2001. This is not good. Historically, Car Wash keeps track of new car sales markets, so our particular company should be doing fine. Also, as any small business will tell you, they must constantly adapt their methods of operations to those forces, which could be a threat.
