Is your business struggling to meet the basics? Check out this guide for some tips to help you try to turn it around.
Over half of new business do not last more than 3 years which is a sad fact however there is a lot of things that can be done to help struggling business survive a lot longer and hopefully make a U-Turn in their business financials. Below are some of the steps that can be taken.
Take out a Loan
If the company has a good credit rating then it could consider some of the business loans that are available. This shouldn’t be defaulted as the first option as ultimately the company will require to pay this money back, therefore, it should be seen as a loan and not your own money. There are many different business loan options out there and some will even give you finance for up to 20 years. This should only be considered as an option if you are convinced that you can turn the situation around and keep up with the monthly repayments. If you fail to do so then you could end up in a lot more trouble.
An option may be to look at your current staffing level and make redundancies based on this. Everyone in a business must add some sort of value however there may be indirect functions or roles that are not contributing directly to your profit line and this may be areas in your company you could outsource. Examples of this could be accounting, human resource management etc. If you are going down this route then people’s well-being should be taken into consideration as you do not want the morale of the whole company going downwards and ultimately it could affect the whole business.
If there is a specific cash flow crisis then you could consider putting a ban on non-essential spend. This could include things like travel or stationary. Use technology to have meetings with others in different parts of the country or world. This could include Skype and link calls. It is great to see people face to face for particular reasons but it is not always the cheapest or most efficient way to do so.
Some struggling business may bring in external consultants to help give them some guidance and support as to what to do. This may be in the form of financial health checks but it could wider than this where consultants could look at your current organisation structure and see if it is effective and efficient. Alternatively, they may look at how it could be leaner by using six sigma improvement techniques to identify opportunities and implement reliable improvement solutions.
You may wish to get a company credit card where you could put some of the upcoming purchases on. What you need to bear in mind when taking this decision is the interest rate. If you do not pay back the full amount each month then you will be hit with interest. The level of interest will vary depending on your current credit rating and what credit card you managed to get.
Trying to salvage a struggling business is never easy. Take your time and plan your next steps carefully so you can make the best decisions possible.