If your business comes into financial hardship, it can be a heartbreaking moment. Everything that you have worked so hard for could be lost, and you may be trying to judge what the best thing to do is. That major decision: ‘should I just let it all go?’ is one of the hardest things that a business owner has to think about, and ultimately act upon. But before you throw the towel in, it is important to assess where the issues lie, what can be done, and whether your company has a future if you can bring it out of the rough patch that it is in. Don’t give it up until you have thought about all of these things; we’ve made a guide to help you through the tough times. Keep the faith!
What is the reason behind your financial situation?
The first thing that you need to look into is why your finances are like this, and whether it is something in your control or not. If the whole economy has just crashed, then there’s no need to beat yourself up about your company not being in the best of places. However, if you’ve been using the business accounts to pay off your own debts (or to take your partner to Hawaii for 3 months) then this is where the issue probably lies. Don’t mix your personal finances with business too much; whatever your situation is, even if it is bailing somebody out of jail, keep your business finances separate. Speak to a company who can help you pay these things in installments, like https://www.katbailbonds.com/.
If you haven’t already got one, you need to set up a team of people (or even one person) who will monitor your business accounts and keep you up to date on a weekly (and daily) basis on your finances. Don’t presume that just because you’ve paid somebody else to look after this part of the business, you don’t need to know what is going on here. If issues arise, you need to have an extensive understanding of your accounts, and how they have developed since your business first opened its doors. The last thing that your accounts team want is to have to explain this to you when you’re in charge, so keep on top of this, and keep your personal and business finances separate. Put the business credit card away…
Who should you look to for help?
Again, if you need some help with your business finances, it is probably best to keep your personal life out of it. This is difficult, we know, when your business consumes your whole life, and it can end up still having a great authority long after you’ve returned home from work. But borrowing money from your family and friends to get your business back on track can be a big mistake, so make sure that you know that you’ll be able to return it in full, and you’ve sorted all of the necessary papers to put their minds at rest. You don’t want to put them in a situation where they say yes out of obligation, but don’t really feel comfortable.
If you want to take an alternate route, then you can get funding and loans from a variety of lenders. This can be tricky, as you don’t want to take out a loan with an unachievable time limit on it (and a high interest rate) and end up getting yourself into more trouble. However, if you decide that you want to start over, whilst keeping some of the things that you found valuable previously, then going under a new business name (and cutting your prior losses) could mean that you get funding to start over, if you can manage to get a decent credit score. There are ways around this, but they can prove difficult, so getting a loan and planning out what you will do with it in your existing company could ultimately be the best idea. Man, we’re stressed just thinking about this…
What is your plan for the future?
If you’re going to make a success out of your business after coming out of the financial hardship that you were in, then you need to spend some time really thinking about what has gone wrong in the past. Don’t fall into the trap of thinking that you’re on the gravy train now, just because you’re no longer pulling your hair out over your finances. Speak to a professional, and come up with an extensive financial plan for the future. Share this plan with your accounts team, stay involved in the finances in your business, and keep reviewing the progress of your profits. If things are looking like they may begin to become unstable again, seek help immediately. Don’t let it slip out of your grasp before it is too late.
It is also important to make sure that you do keep your personal and business finances separate, so that any personal issues will not drag your business down with them. The worst thing about mixing the two will be that if one goes down, it will take the other with it. You don’t want to lose control of your personal accounts, and bring your business to a halt, too. Your business could actually bring you out of your personal debt, and you’ll be glad that you kept the two separate. Don’t spend money before you know that you really have it, and limit your expenses if you can. After a while, you’ll be able to relax about this a little bit; you don’t have to be Ebenezer Scrooge forever!
So, if you find that your business is in financial hardship, there are many things to address. Firstly, find the root of your issues, and see whether it is in your control to rectify it. Secondly, look to businesses, and maybe friends and family members, for loans and other means of financial support, to get your business back up and running. And finally, plan well for the future. Good luck!