Running a business can be challenging at the best of times, especially if you’ve recently launched a startup, and you don’t have much prior knowledge to draw upon. That being said, even the most experienced business owner can find themselves falling into a financial rut, particularly in difficult economic times, such as those we are experiencing right now.
If you have found yourself in this uncomfortable position and you are desperate to find ways to pull your business out of its metaphorical hole and build a brighter future, here are some top tips to get you started.
1. Ask Yourself Some Crucial Questions
One of the first things you need to do when you realise that you need to get your business out of a rut is to sit down and ask yourself some potentially difficult questions. It may not be the most pleasant of tasks, particularly if you know that you may have been in denial about some issues your business is facing. However, it’s essential to pinpoint exactly what your current problems are, so you can then begin finding effective solutions.
In particular, some of the most important questions you should ask yourself include: are there any departments in your business that are not operating as efficiently as they could be? Are there any areas of the company where mistakes occur too frequently? Is your business following a reasonable budget? What are your competitors doing that your company is failing to do, in order to drum up more business?
Once you have come up with the answers to those questions, you have to ask yourself next: what are you and your employees going to do to resolve these issues?
2. Negotiate with Your Suppliers
Now that you have a more definitive idea of the problems that have contributed to your company’s financial rut, it’s time to create a plan of action to get your business back on its feet.
Part of this plan should include negotiating with your various suppliers to see if you can be given a more favourable rate. In cases where this is not possible, you may wish to switch suppliers altogether.
For example, if you feel you are paying too much for your business water usage, you can compare business water rates with the help of The Business Water Shop. They help companies of all shapes and sizes secure the most competitive business water contracts. First, you will obtain various quotes from their trusted suppliers, and once you have found the ideal rate for you, they will even take care of the switching process, making the entire procedure hassle-free.
3. Devise a More Effective Invoicing System
Sometimes, customers failing to pay on time can be one of the factors behind a company’s financial difficulties. If this is the case with your business, the good news is that there are a couple of things you can do to speed up the payment process.
The first thing is to make sure that you chase up any customers who have failed to pay on time. You may also want to consider altering your company’s payment policy, shortening the amount of time that customers have to make good on their invoices.
Finally, you can make early payments a more appealing prospect to your customers by offering an incentive or two, such as discounts or rewards. While this may cost you a little initially, it will benefit you in the long run by encouraging your customers to make timely payments.
4. Consider Your Staffing Needs
If the financial rut you have found yourself in is particularly deep, you may have to reconsider how many staff your company actually needs. If some employees are consistently failing to pull their weight, or if the jobs they are doing could be automated – or are not entirely necessary to your company’s success – you may need to consider making staff cuts.
Many businesses find it more cost-effective to outsource certain tasks, hiring freelancers and specialists to get the job done on a one-off basis, without the requirement for a regular salary.
5. Come Up with a Debt Management Plan
Last but not least, if your business has incurred some debts of its own as a result of the rut you are currently occupying, it’s essential to formulate an achievable debt management plan to pay them off.
Create a monthly debt repayment scheme and ensure you make each payment on time. Where possible, try and ask your creditors for a payment extension; you may be pleasantly surprised how many will grant it to you.
In Conclusion
Discovering that your business has fallen into a financial rut can be a disheartening and potentially even frightening experience. However, it’s important to focus on being proactive and, where necessary, seeking advice and assistance.
After all, there are plenty of things you can do to combat the problem and help your business get back on an even keel. Hopefully, in a few months, you will once again be back ‘in the black’, with the rut firmly behind you.
