You started your business with big plans of being successful and earning a living, but an unfortunate fact of business is that companies will suffer financial hardships or at least one financial setback. Whether those hardships are pandemic-related or linked to other urgent situations, the effect can still be the same. Your finances will be negatively affected, and it’s up to you to lead the road to recovery.
Here are 5 steps you can take to get your business on the way back from a financial setback.
Find areas to cut back
As a business owner, expenses are inevitable, but there are ways to reduce your spending and save money. Negotiate rates with suppliers or find out if you can get discounts for being a long-term client or early payment. If not, see if you can change providers. Look for ways to reduce office expenses. Can your company work from home? Can some of your office space be rented out to other companies? Can you change your utility providers?
If possible, you don’t want to cut back on your staff, but eventually, you may have to. If you don’t want to lay staff off, try reducing their hours or cutting back on bonuses until things turn around.
Follow up with your clients that owe you money
During busy times, it’s easy to be more laid back with clients who owe you money. When you’ve had a financial setback, it’s essential to note who owes you money and start the collection process. Go through your invoicing system and follow up with everyone that owes you money. You might be surprised at how much may be owed to you.
If cash flow is a worry, consider charging clients a deposit to start work with you. Doing so speeds up how quickly you will have money coming in.
Diversify your income
Governments around the world are offering different assistance packages to small businesses affected by the pandemic. Look into income support schemes and business grants in your area designed to help your business recover.
Consider other ways of diversifying your income. If you’re an expert in your chosen field, offer virtual courses or workshops to teach others what you know. If your business is a brick-and-mortar store, offer online shopping or curbside pickup. If you provide services in one niche, consider whether another niche might be close enough to yours to allow for expansion.
Review your budget
If your budget was created before the financial setback, go over it again and revise it as needed. See if anything in it can be delayed or removed. If you plan on offering training for employees, consider postponing for a few months. If you budgeted to expand your business, put that on hold until you’re more financially stable.
Increase your marketing
You need to bring in customers. To do this, you will need to market your business. Traditional advertising may help, but there are many more cost-effective ways to go about it. Explore social media or content marketing. Consider email newsletters with specials or updates or search engine optimisation.
Marketing is a way to remind people about your business, and although it may not seem like a good idea to spend money at the moment, some spending will be worth it in the long run. Not all marketing needs to be expensive—and some may be just as effective as traditional advertising.
Final thoughts
Financial setbacks are frustrating and upsetting, but it doesn’t mean your business is finished. Follow these strategies to help give your company the best chances of recovery. Get in touch with us today, and let us discuss what will help you. Join the Conversation…