How To Recover Your Business From Financial Difficulty
Every few months we see another high street store go from being a much loved brand to yet a company struggling under the weight of financial difficulties. None of us are exempt from this – we can all suffer financial setbacks. This can come in the form of someone messing up profit projections, or it can come in the form of new market competition. Either way, it’s important to realise that recovering from these setbacks isn’t impossible. Here’s what you can do to recover your business from financial difficulty.
Stop and take stock of the situation
It’s only natural that your first reaction is to panic. This being said, panicking never got anybody anywhere – it’s important to remain calm and take some time to take stock of the situation. More often than not, these setbacks are only temporary.
Evaluate the nature of the problem
Part of this stock taking, as it were, lies in deducing the nature of the problem. Is it new market competition, or did one of your major clients file for bankruptcy? Did your company miscalculate profit projections, or did a disaster interrupt your supply line? Once you’ve figured out what caused the problem at hand you can start picking up the pieces and start fixing the problem.
Focus on the present, not the past
Financial problems can shake the foundations of any company, however well-established they may be. However, you don’t fix problems by dwelling on the past – once the problem has been fixed you can find new incentives, new leads and new clients, focussing on getting back to the top of your industry. Focussing on the past and making excuses instead of working towards the solution can cause your financial setbacks to be the end of your business – keep your eyes forward and buckle down.
Look for ways to increase flexibility and cut expenses
We all know that flexibility is important to any business. This is truer after a financial setback than any other time in the history of your business. Sure, you may have had priorities in place before the problem arose, but you need to see if those priorities are all still in order. You may need to put of that hiring drive or opening that new office for a few months until you’re sailing on smoother seas.
One way you can help expedite this process is by cutting expenses. This could be as simple as moving to a smaller office with lower rent. In a worst case scenario, however, you may wind up laying off staff. While neither are particularly appealing, they’re much better than letting the company fold.
Have a backup plan
When all else fails it’s important to have a backup plan. As with many things in life, there is a solution to most problem if you have the right information to hand. If you’re struggling under the weight of company debt, for example, you can sit down with your accountants and look into CVAs (Company Voluntary Arrangements) which allow you to pay off creditors instead of going bankrupt. Remember, very few problems are insurmountable – a proactive approach and a solid backup plan can help you weather the storm and emerge from the setback stronger than ever before.