Growing a business can be one of the most rewarding and challenging things that a person can do. It’s exciting to think of a good business idea, and then see it take shape. It’s hard work but independence is one of the most appealing parts of running your own business.
The more challenging side of running a business is that you want to remain in the 50% of businesses that survive the five-year trading mark. There are steps you can take early to ensure that your business survives in the long term.
Cash flow is key to business growth and success, and there are challenges in keeping your cash flow stable because, let’s face it, we live in an uncertain world. Who would have ever factored in that a global pandemic might hit and therefore, sales would fall through the floor?
It can seem appealing when things are tight to turn to short-term lending as a solution. Short-term loans are very available and can offer great terms in the first few months of the loan. An injection of cash might allow you to upgrade your equipment or fit out, or fund important marketing activities to grow your client base.
The downside of short-term loans is that they are unlikely to fix your business long-term if you are already struggling with cash flow. A short-term loan may be a Band-Aid fix for a while, but eventually, you may have to face the other issues that led to the business downturn you are facing.
Given the numerous factors beyond our control, what options do business owners have when confronting a cash flow crisis?
- Try to increase your sales inexpensively. Do your own Facebook marketing and pace it to align with sales so you don’t overspend
- Give your shop a lick of paint or have equipment repaired rather than completely redecorating or buying new gear
- Keep an eye on expenses, however small – ask yourself – is that staff member working well for the business? Am I wasting money on multiple mobile phone contracts and could close old ones off? Would my landlord accept a lower rent for a short term if I promised to pay on time? Is that menu item selling well? Have I got excess stock I could sell at a reduced price?
All of these suggestions may help.
If you feel overwhelmed by debt despite your efforts, we are here to help.
Our compassionate and understanding specialists will guide you through various options to manage your debts and restore your business finances.
