Seven Ways You Can Get Your Business Through Difficult Periods

Seven Ways You Can Get Your Business Through Difficult Periods

When your business is slow, and you are short of cash, you might think that it is time to throw in the towel and go back to work. However, you need to know that most business owners have experienced financial difficulties and found solutions to bridge their finances and start over. It is likely that you need to take a step back and reflect on what went on, so you can make adjustments to your business model in a way that you can secure more profit and achieve a higher level of financial stability.

#1 –Creating a Recurring Payment Product or a Deposit Scheme

If you already figured out that there is a serious cash flow problem in your company, and you need to make your income more stable, you can brainstorm ideas how to create a product or service your customers are willing to pay on a monthly or quarterly basis. This way, you can create a regular revenue source and increase your financial security. Alternatively, you can start asking your customers to pay a deposit, especially if you need to spend money on manufacturing their products or setting up their services.

#2 – Secured Finance

You might also try and secure financing for your business assets. You might have an office building or any other assets, including a car or van that can be used as a security. This way, you can save money on the interest. You will be able to carry on using the security assets, provided that you make the repayments on time. If your business needs an urgent cash injection, this method might be the right solution for your temporary problem.

#3 – Reducing Costs

When your business regularly experiences cash flow problems, it is time to look at your budget and expenses. You might want to move to a smaller office, or let some employees go. Find ways of increasing your profit margin and reducing your costs. When your expenses are regularly above your business income, you have a serious problem, and you need to deal with as soon as possible.

#4 – Business Loans

The first thing that will come to your mind is business financing. If you know for sure that the situation is only temporary, you might get your application approved by your bank or finance company in just a few days, and focus on improving your cash flow straight away. If your business is new, you might not have a good credit rating. You might also think about taking out a personal finance if you are a sole trader. Check for loans for those with poor credit and find out how much you can get and what your monthly repayments will be.

#5 – Renting Equipment or Property Out

When you feel like there is little chance of securing work on your expensive equipment, or you are not using your entire business unit, you might think about subletting. This way, you can get some money back to cover the monthly payroll and bills. However, if the business doesn’t pick up after a few months, you might need to take a step back and rewrite your strategy. It is important that you keep track of your finances, and cut unnecessary expenses.

#6 – Bridge Loans

A bridge loan is a good option if you are waiting for an amount of money; either investment or finance, and you need to cover your expenses for the time being. You can apply for a bridge loan as an individual or company. This type of loan is generally faster than other credit products, so if you have urgent expenses to cover, and you don’t have the cash in the business, you can use it for getting back in the black and avoiding late charges.

#7 – Raising Investment

In some cases, all your business needs to grow and prosper is a cash injection. Get in touch with angel investors and create a business plan that will impress them enough to invest money in your struggling company. It is never too late to turn the trend around and come up with a new, more viable business plan. Raising capital for small and medium sized businesses through angel or venture capital investors is a good way of overcoming temporary business struggles.

When your business is not producing enough profits, and you find yourself short of cash regularly, you might want to think about the next step carefully. Choose the solution that will enable you to invest in improvements that will make your business better long term. And no matter what, always work out your numbers and be realistic about what you can and cannot afford.

How do you stay strong when you face challenges? Let us know in the comments below. 

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