What Can You Do if Your Business is Facing Financial Difficulties?
With the recent shrinking UK economy, not to mention soaring inflation and energy prices, it’s likely that many businesses will experience trouble.
22:10 29 June 2022
Companies often fall into financial trouble. In fact, more than 135,000 UK businesses closed during Q1 2022 according to the Office for National Statistics. That’s the worst-case scenario, yet whether a business is facing insolvency, struggling to turn around falling revenues or exploring ways to resolve cash flow problems, dealing with company finances can be an extremely stressful experience.
With the recent shrinking UK economy, not to mention soaring inflation and energy prices, it’s likely that many businesses will experience trouble in the near future. So, if you do find your business facing financial difficulties, what steps can you take to resolve them? We’ve written this short article to explore the options.
If you find that effective financial management is one of the sources of your business’ problems, consider finding ways to incorporate technology. Financial planning software digitises money management, covering everything from modelling and planning to payroll and other processes. It’s a key part of an efficient and centralised financial management system and could help you to streamline your business’ finances.
Think big picture
While it’s tempting to put your nose to the grindstone and apply all your efforts to the day-to-day operations of your business, working harder isn’t always enough to solve problems.
Instead, try to take a wider look at the situation. Are there any obvious departments or processes that are leaking money? What strategies can you implement to improve income? These questions and their answers will help you ascertain the leverage points you can use to lift your business out of its difficulties.
Slim down your operation
When business is going well it can be easy to forget about the need to cut down costs. When times are hard, you need to return to these considerations. Figure out which parts of your business are the most essential and close down those parts that aren’t. This might mean redundancies, selling assets and other painful decisions, but all the same, you need to make your business’ survival your first priority.
Seek expert advice
Unless you have fully qualified financial practitioners within your organisation, it’s a wise idea to bring an expert into the fold. Not only will they be more knowledgeable and experienced in dealing with these problems, but they’ll also be less emotionally attached to the outcome and therefore better positioned to make rational decisions.
Though it may be difficult to hand over the reins to somebody else, the simple fact is that something isn’t working at the moment. This means that some sort of change is needed to fix it and often third parties are better at seeing exactly where this change needs to lie.