It’s not uncommon for businesses to have periods of financial trouble. Most business owners will have gone through tough periods and this can vary from small cash flow issues up to full-scale crises, and it’s how we deal with these that can be key to how we get out of them. Here we offer up 5 steps to take if your business is in trouble and how they will help you.
Make Sure Your Accounts are Up to Date
If you are in trouble the first, and essential, thing to do is to be sure you know how much trouble you are in and this means making sure your accounts are up to date. If your bookkeeping is current and accurate you can look at how much money you owe and how much is owed to you, and what assets you own this then at least gives you all the info with which to work with. You can act, such as chase invoices that are overdue or even look at invoice financing where you can borrow money the invoices owed as security.
The one thing that is always true in any walk of life is that we don’t know everything and this is especially true in business, so seeking advice from a business advisor is key in situations like this. But more specifically you should speak to an advisor with experience of helping firms in financial trouble.
Consider Insolvency Options
This is something that your business advisor may be able to help you with or if they can’t then they surely will be able to recommend a good insolvency advisor. There are various types of insolvencies, a company can enter administration where an administrator will take charge of the business, make cuts and leave the company healthier on the other side.
If it is more severe then liquidation, the breaking up of the company may be the only option and many companies can take care of this for you, even if it is a specialist issue like a charity liquidation.
Talk to Your Creditors
Before you get as far down the road as liquidation you should try everything you can to sort things out before you lose your business. Talk to your creditors as you would be surprised how easy it may be to arrange to pay what you owe independently of any legal or formal action. This is often the easiest and quickest way to sort things out.
Make a New Business Plan
You should always have a yearly business plan and when you are in trouble then it’s important to revisit it and see where things went wrong. It may be that you have just lost interest, maybe you’ve lost a big customer, or the market has seen a change? It is important to find this out and make a new business plan that includes the strategy you have chosen to dig yourself out of this mess.