During tough economic times, we all need to tighten our belts and small businesses are certainly no exception. Business owners are wise to watch their bottom line, ensure that their operating costs are under control and curtail needless spending. This might be called “working lean and mean.” However it is critical to keep a customer-centric approach. So, let’s call it working lean and smart.

Here are a few areas to address when reviewing your business.

Besides understanding your bottom-line and knowing when you are breaking even, making a profit, it is also critical to watch your cash flow.

Understand your financials including accounts receivables and accounts payable, and know where you can save money by setting up a system. A system that works is one in which your accounts receivables is “industry average” or better.

This means that if you are receiving payment for services rendered 60 days after you completed the service and the industry average is 30 days, you have room for improvement. The smart policy is to get payment in as quickly as possible.

On the other hand, with accounts payable you may want to negotiate better credit terms and extend your time to time to pay (if it does not hurt your credit rating).

It is OK to ask for better terms that lower your interest rate. This will save you money now and in the future.

The Economic Stimulus Act will have opportunities for small business owners to access lower interest loans and tax credits.

The Small Business Administration will be rolling out programs that will help businesses in this cash crunch.

If you’re interested in having a Napa Valley College Small Business Development Center business adviser review your cash flow statement and operations, call the SBDC at 253-3210 to set up a free appointment.

Many of our small businesses are using sustainable green strategies to save money and operational costs. Just like mom told us, turn off the lights when you leave the office. Did you know using laptops instead of desktop computers can save you 30 percent more in energy costs? If you send electronic postcards instead of brochures, you not only save your company the cost of postage and printing, you are also doing your part to save the environment.

For more information on developing sustainable business practices contact Sustainable Napa County at www.sustainablenapacounty.org and call the SBDC to speak to a green business adviser.

While you are reviewing methods to be more frugal, try not to skimp on your customers. During times of economic stress, it is critical to be “customer-centric.” Your customers are one of your lifelines to get you through this troubled economy. Your other life-line is your internal customers — your employees. This is an excellent time to reach out to your old customers to remind them that you are still here, alive and kicking and ready to offer exceptional service. Make a point of calling or writing a short note to your core customers to let them know that you are depending on them.

For more ideas on working “lean and smart,” call us at the SBDC.