Every business has its ups and downs. Even the biggest companies on the planet go through rough patches. The mark of their success is how they dealt with those difficult times. Some companies simply fade out, as they can’t find a way out of the financial decline. Others figure out a way to turn it around, and take a new direction.
If your business is going to last long-term, you need to learn to deal with these problems. You will always come across money issues, and a brilliant company will turn it around. Here are some of the best ways to turn that decline into success.
Sell some assets
The scariest thing about financial trouble is the cash flow problem. Your immediate balance is slashed, and it gets very difficult to pay even the most basic bills. Cash flow is essential to pay your employees’ wages, take care of invoices, and pay utility bills. Without a decent cash flow, you’ll default on payments, incur more debt, and start out on a slippery road. You need money, and you need it quickly. Selling assets is, by far, the quickest and best way to unlock money. Sell old equipment or old stock, and get an instant return on your money.
A good businessperson knows how to build relationships with their suppliers. If you’ve got a good network of suppliers, you can negotiate on certain payments. Let them know that you need a little breathing room. Or offer them something else to sweeten the deal. Promise them your next big contract if you can agree on a delayed payment. Again, it’s all about giving yourself room to breathe. Room to find that extra money.
Rethink your offices
Look at your balance sheet, and determine where the biggest outgoings are. We’ll bet your office costs are right at the top of the table. Rent costs, and all the associated utilities payments will quickly cripple your budget. Look for an alternative option, even if it’s just temporary. Try a used modular building as an economical and efficient alternative. They’re portable structures that will significantly lower your outgoings. You can also let some employees work from home to reduce space and energy use.
Cut your other overheads
Take a long, hard look at all your overheads after the office reshuffle. Where else can you shave some temporary costs? Perhaps you could manage the payroll better. Cutting employees is a last-resort, but try banning overtime for a while. Or cut bonuses and certain expenses, just until you get back on your feet. Cut your inventory and supply costs for the next few months, and manage your existing stock better.
We’re sure this is the last thing you want to hear! But, if you can see the decline coming from a long way away, then investing is the best possible thing you can do. Mitigate the approaching disaster, by investing in the solution. If your existing market is drying up, invest in new marketing costs to target new customers. Invest in a new upgrade for your product, or invest in an experienced team member who can help you avoid the crises. The earlier you do this, the better!
Business survival is all about foresight, intuition, and strict budget cuts. Good luck!