Businesses can get into financial trouble and then they struggle to pay their bill and sometimes cannot meet the payroll. This can be extremely stressful for the owners of the business, and as many of them are fighting to save the livelihoods of themselves and their employees.
Ensure You Are Making A Profit On Every Sale
It does not matter if you are selling a service or a physical product, you have to ensure that you make a profit on every sale. Check out in detail what your costs are to produce a sale, and do not forget to include any overheads such as your staff. If it is a service you are offering. Translate this into how much money you need to make each hour, and make sure you charge more than that. If it is a physical product you are selling, make sure the cost of it has not risen without you realizing, and increase your price if it has.
Cut Your Business Expenses
Look very closely at all of your expenses and reduce them wherever you can. Could you get a better deal for your utility bills, for example, or are there any savings to be made on stationery and other overheads. The last you want to have to do is lay people off or reduce the hours they work. If it means the difference between the business surviving or not, it is a decision you may well have to make.
Communication
Do not ignore your creditors. Nothing will annoy them more than never getting a returned call or an answer to an email. Any professional advisors, such as Chapter 13 bankruptcy lawyers, would tell you to keep in contact with your creditors as much as possible. Many of them will appreciate knowing that you are going through a bad patch, and some of them will help by allowing you extra time to pay. You have to remember that at least a few of them will have suffered the same experience, and if they know you are fighting back they are far more likely to help.
Plan Your Cashflow
Don’t just guess at when you will be able to make payments to anyone, work out a detailed cash flow projection and try to stick to what it shows. It is no use promising to pay someone in two weeks time if the cash flow shows the money will not be there for four weeks. False promises are far more likely to lead to someone taking legal action against you, but stick to what you have said and they will be more patient.
Of course, there will be times when unexpected things happen and you cannot meet the promised deadline. Then you need to let the creditor know what has occurred, and keep them fully informed. It is also better to pay them something rather than nothing, and then you are reducing the debts along the way.
Being a business owner is not always as easy as people seem to think. There seems to be this idea that if you are running your own business you must be loaded with cash. Any owner will tell you that is not the case, and often they go without any income themselves to make sure their staff are paid.