What to do When Your Business is in Trouble

It can often be disconcerting to find that your business is in trouble, or to find out that something as fundamental as cash flow or payment delays is actually affecting your business and its future.

However, all is not lost, here are some tips to see off any worries you may be having:

Don’t panic

The first thing is, not to worry unnecessarily. It may seem difficult, but there is help at hand and like a lot of problems, can be rationalised by recognising the issue and looking at things with a calm head on or with the insight of others.

Sharing a problem, as they say, can halve its impact. Taking steps to correct any issues, be they insolvency, cash flow or payment gaps can make such a huge impact.

Running a business, especially in times of great stress such as post-COVID, in a recession or at the brink of what will be a huge energy crisis is not easy. Therefore there is no surprise when it comes to business owners struggling mentally as well as financially. Support is there, it just needs to be sought in the first place.

Consolidate

Consolidation is one of the most easily executed ways to start the road to financial recovery for a business. There’s several ways you can do this, but prioritising the various debts you have is a great start.

Placing HMRC and similarly important debts at the very top of the pile should be your first move. The more you ignore notices or demands from HMRC, the worse your situation can get, and fast. There’s a lot to be said for negotiating with them too. Oftentimes there are ways to arrange payment schedules and more manageable terms to service or resolve your debts.

Next should be any credit debt you have, whether this is business credit card accounts or business loans. Defaulting on these can harm your ability to borrow or even operate in the future, so having some sort of plan in place here to deal with debt can be fundamental as to whether you make it through this current period of stress.

You can also seek to negotiate better terms with your supply chain. Whether this is securing smaller order amounts, seeking better payment terms or securing preferential rates

Review

There are several things you can review to make a difference to your bottom line. Some areas are more obvious than others. For example, looking at your original business plan, comparing it to your current one and taking a step back to consider it’s effectiveness is always useful.

What has changed? Can you make any changes that would open you up to new opportunities or markets that were previously impossible for you to take advantage of? There may be ways to pivot. COVID definitely showed us all how easily businesses can change direction, so it can be done.

Review cash flow forecasting too, this is essential if you are to have a realistic handle on your incoming and outgoing expenses. Planning a big purchase? It’s not just how much you have on the balance sheet at present, but what you will have by the time that amount is taken to pay for your purchase.

Having this kind of information on hand is essential and if your knowledge here is limited then it needs to be sharpened and honed to best perform for you.

There is always a light at the end of the tunnel. It may be a well-worn cliche, but it rings true in almost every aspect of business.

Not sure what to do?

If your company is struggling with unmanageable debts, poor cash flow, or an uncertain future, you are not alone. We speak to company directors struggling with the same issues as you every single day, and we are here to give you the help and guidance you need.

Call our team for free, no-obligation advice today on 0800 975 0380 or book a free consultation