FROM PURCHASING SUPPLIES and inventory to paying vendors and making payroll, the credit crunch has made even the simplest tasks more difficult for small-business owners.

For Tony Jeler, owner of Swift Signs, a corporate sign maker in Sunnyvale, Calif., the hardest nut to crack these days is getting customers to pay up. Last week, 25 to 30 of his 250 accounts were overdue, compared with just five to 10 overdue accounts under normal circumstances. That resulting $20,000 deficit weighs on everything else the business does. “I have to buy supplies before I get a sign up. Not having a constant cash inflow makes affording to even make signs tough,” he says.

Small businesses have to step up their efforts — and get creative — if they want to survive the credit crunch, says Peter S. Cohan, president of Peter S. Cohan & Associates, a management consulting and venture capital firm in Marlborough, Mass. Here’s how to overcome five of the most common credit crunch problems:

Reeling in Receivables

The best way to reel in wayward customer payments is to not let them unravel in the first place by introducing late payment fines or penalties to your payment policy, says Cohan.

If your business is already weighed down by a stack of unpaid debts, picking up the phone and persistently reminding your clients about their obligations is your next best option. If you’re going this route, consider hiring a collections agent, says Justin Kitch, a vice president at Intuit Small Business, a unit of the Mountain View, Calif.-based bookkeeping software firm Intuit (INTU). Otherwise, you risk straining your customer relationships and losing future sales. But prepare to pay up: Collections agents keep 30 to 40 cents of every dollar they collect, Kitch says.

To circumvent the cost of hiring a collections agent and keep an arm’s length between him and his clients, Jeler brought in his wife to manage collections. (For advice on getting your customers to pay, read our story.)

Paying Bills On Time

When there isn’t enough cash to go around, paying one’s own bills naturally gets tougher, says Cohan. He suggests prioritizing: First, pay the costliest bills — those with late payment penalties — and the ones that impact your credit. Then, work down the debts you need to pay to keep your company afloat. For the rest, try negotiating payment arraignments, suggests Bob Fifer, president of Fifer Associates, a business management consultancy in Great Falls, Va. For instance, if you offer to pay cash, vendors may be willing to extend your payment schedule. If you’re in really bad shape, they might even accept less than what you owe, Fifer says.

Winning New Business

Since getting new customers takes money, business owners are dispensing their limited marketing dollars more discriminately these days. Rather than advertising in newspapers, for example, Patti Styka, owner of Foster City, Calif.-based Elegant Lagoon Cruises, is tapping into her existing customer base for added sales and referrals with the help of an email marketing service. For just $15 a month, she can send an email highlighting a special promotion or discount offer to up to 500 current and potential customers. On average, she says, about 50% of the people on her list open her emails and about 12% click through to her site for more information. “Compared to the cost of newspaper advertising, it’s a no-brainer,” she says. (For more on inventive ways to price your products to attract new customers, read our story.)

Making Payroll

While many firms have laid off employees to reduce payroll expenses, doing so can cost more in the long run. Not only do employees contribute to a company's productivity, they're trained to your company’s specific needs. To avoid the cost of retraining new hires down the road, implement employee furloughs or unpaid vacation days, suggests Cohan. (For more, read our story on trimming payroll without trimming jobs.)

Expanding Operations

It sounds counterintuitive, but as commercial rents have nosedived and business valuations are scraping the floor, now may be an ideal time to expand, says Gregg S. Fisher, president and chief investment officer at New York financial advisory firm Gerstein Fisher. “Proactive business owners are working toward positioning themselves for growth,” he says. “They are thinking about making investments in the business.”

Of course, expansion is largely contingent on getting a loan, which is difficult in today’s tight credit climate. However, businesses with a solid track record that can prove their future profitability will be in better shape. (For more on improving your chances of getting a loan, read our story.)

-Write to Diana Ransom at dransom@smartmoney.com

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