Running a business is rarely easy but matters can be made more difficult when there is a financial crisis. You will understand this yourself if you have ever panicked because of a lack of funds sitting in your business bank account. When you need money to keep your business running, it's understandable that you might start to sweat. And if you owe money to the bank, perhaps because of business loans you have taken out, you might also start to fear the prospect of bankruptcy.
Our advice? Don't panic. A financial crisis doesn't have to signal the end of your business. There are things you can do to help your business and these include the following.
1: Deal with your debts
Your situation will become worse if your debts spiral out of control, so use whatever money you do have to pay off your debts. If necessary, you could also seek debt relief advice from a
Licensed Insolvency Trustee, for options that don't automatically include bankruptcy. Yes, you might have to limit spending in other areas in the meantime (as we discuss below), but you will save yourself from huge financial problems if you prioritize your debts at the outset.
2: Stop spending on things that aren't a priority
After your debts, there are other things to prioritize, including employee wages, client bills, and utility costs. Pay these if you can and free up money by cutting down on anything that doesn't have to be a major priority, such as subscriptions, new equipment, and extra employees to your workforce.
3: Find ways to reduce your bills
As you would do at home to improve your financial situation, find ways to reduce your bills. Shop around for cheaper providers, reduce your energy usage, and even cancel certain services if they aren't integral to your business. If your business can accommodate remote working, this would be useful. By asking your employees to work at home, you will have far fewer overheads to worry about on your business premises.
4: Keep marketing
Despite the financial crisis you are going through, you should never stop marketing. However, you obviously shouldn't spend a ton of money when promoting your business. Instead, look for free and cheap ways to market your business, as this way, you will do much to encourage people to spend money at your business, while still cutting back on your own costs. Check out the linked article for some very good ideas.
5: Get back any money you are owed
Are you owed a tax refund? Are there any invoices still waiting to be paid? Chase up the relevant people as the more money you can make back, the better. This way, you will be able to bolster your bank account, pay your employees, and perhaps manage the other facets of your business.
Not many of us cope well in a financial crisis but we can still come through the other end with our sanities intact. If you ever find yourself in such a position, we hope you can rescue your business too. Consider our suggestions and then seek advice from financial professionals for advice on what to do to help your business before or during a financial crisis.
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