Wine Technology Blog @ WineWeb.com

Recently, when potential clients come to me with questions about our company and services, I can sense that the economic conditions are putting more of an emphasis on business stability in their potential business partners. In addition to the typical questions about how long we've been in business and how many clients we serve, I'm getting questions on how we intend to survive any economic downturn. 

I'm thankful for these questions, as gone are the days when being larger gave you an advantage in business survival. If I were to put on my CPA hat (actually dusty green visor from what seems like a lifetime ago), I could think of some questions that companies should be asking potential vendors.

1. Do you have a positive cash flow each month?
2. Could you still make a profit on 20% less revenue each month?
3. Is there any outside debt on your balance sheet?
4. Have you had positive growth for the past 3, 6 and 12 months?
5. Do you have venture capital funding or investors that you need to repay in the next 2 years. If so, can your monthly profit cover the payments?
6. Will you need additional funding to meet operating costs in the next year?
7. Do you have a line of credit? If so, have you borrowed against more than half of that amount?
8. Have you had to layoff any employees in the past year?
9. Have you had to reduce the scope of any service enhancements or growth plans in the past year?

Getting answers to questions like these should give a company a better comfort level (or lack of comfort) with a potential vendor. For the record, my answers are: 1.Yes, 2.Yes, 3.No, 4.Yes, 5.No, 6.No, 7.No, 8.No, 9.No.