Setting up your own company and watching it grow into a functioning small business is one of the greatest joys there is in life. However, that just makes it harder to deal with when your business starts to experience some rough times, and historically when your cash flow starts to dry up.
The last thing any small business owner wants to see is that their money is running out - after all, it isn’t possible to run a successful business on enthusiasm and entrepreneurial spirit alone - but it is a pretty common occurrence among startup owners in particular.
If you’ve recently had to face the fact that your company is fast running out of money, it’s important that you don’t panic. Panic will lead to stress and the more stressed out you are, the less capable you’ll be of solving the problem, and you can solve the problem - there’s no need to call a bankruptcy lawyer just yet! Here’s are a few things you should do first, to give yourself a fighting chance, instead:
Remember The Successes
It’s important when you’re having financial problems to remember the successes you’ve achieved so far. Doing this will stop you from falling into a pit of despair and set your mind to finding a good solution. If you're still in business chances are you've made some good decisions that you can hold on to.
Raise Money
Obviously, if you’re running out of cash, finding a way to raise more is a pretty neat solution to the situation. Obviously, it isn’t always that easy. If you’ve reached your limit with the bank or you’ve maxed out your credit cards, the situation might seem hopeless, but maybe you could try crowdfunding, angel investors or peer to peer lending sites instead? You never know who might be willing to throw a few bucks your way.
Cut Your Costs
It’s not always easy to do this, but if you can cut your costs by around one quarter, that will really help you with your cash flow situation. In order to do this, you’ll need to get down to the nitty-gritty and really analyze where you’re spending too much or where you can make cuts without damaging your business irreparably. If time is short, you may need to do something even more radical to save money, but that has to be down to your discretion, after all, no one knows your business better than you.
Chase Up Those Invoices
Most businesses have at least a few unpaid invoices that they’ve let slide because they want to keep the customer on side or chasing them up simply hasn’t been a priority. Now is the time to change that. If you desperately need money to stay afloat, you need to start chasing those receivables as aggressively as you can without alienating your clients - it could mean the difference between your company sinking and swimming.
Negotiate
If you don’t have the money to pay for the basics like renting your office or buying new stock, then it’s always worth trying to negotiate with the parties involved. If you’re upfront and you tell them that you’re having a few cash flow problems at the moment, they might just be willing to help you out, especially if you’re on good terms with them, and you shouldn’t be too proud to just get it out there - it’s better than getting evicted or losing your business completely, after all!
Threaten To Switch Vendors
Sometimes you have to play hardball. If negotiating doesn’t work, in terms of your stock, at least, it’s worth calling up your vendor and telling them that you’re thinking of switching to a better deal. Chances are they’ll want to keep you, if you’ve been good customer in the past, and that means they’ll be more open to offering you a few months of free service. If this doesn’t work, then actually start looking around for other vendors to see if you can get a better price,and therefore save some much-needed money.
Boost Your Sales
Generating revenue by offering special offers and deals is a good way to get the cash flowing in fast, although it could be difficult to achieve if you don’t have much of a budget for marketing. Cash is king and it's time to make some moves and close some deals.
Cut Back On Your Staff
It’s sad, but sometimes it’s necessary to cut staff if you’re running out of money fast. Obviously, you’ll want to keep your core staff, but anyone who does not perform a vital function may have to go in favor of outsourcing services. If you can, it’s nice to ask for volunteers to leave the ship, but if push comes to shove, you must be prepared to fire one or more employees for the greater good - your company’s survival. Desperate times call for desperate measures and sometimes you have to make the tough decisions.
Time to get down to it and get your cash flowing again with loans and lenders!
I hope you enjoyed this article about how to get your company's finances back on track by making some changes.
Interested in more articles about frugal finances?
Read My Posts:
- Why You May Need To Ditch Your Current Marketing Strategy
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