5 Tips for Businesses in Financial Trouble
Almost all businesses go through tough financial times sooner or later, and these five tips can help you get through them.
To an ambitious business owner, hitting a financial wall can feel devastating. But most savvy entrepreneurs understand that a bump in the road doesn’t necessarily indicate a failure or a long-term disadvantage. If you’re dealing with heaps of bad debt, or if your debt settlement solutions are proving ineffective, you could find yourself in a hard, but temporary, rough patch. Follow these tips to get through it:
- Strictly manage your cash flow. When you’re experiencing tough financial times, your cash flow is your most important resource. Do everything you can to keep your cash flow positive, including making regular bill collections and delaying payments on what you owe for as long as possible without penalty.
- Examine your debt structure. Look at your short-term debts and your long-term debts and analyze your situation. If your short-term debt is putting pressure on your current business operations, is it possible to temporarily increase your long-term debts to cover it?
- Check out your insurance policies. Some insurance policies are more important than others. Is it possible to increase the deductible on your fire insurance or hazard insurance? What can you do with your life insurance policy in the short-term?
- Be proactive. If you’re just starting to see the results of your financial problems, act fast. The sooner and more responsively you act, the faster you’ll get back on the correct fiscal track.
- Talk with your banker. You may be eligible for SBA guaranteed loan programs, or other programs that can help you out of your position.
With these five strategies in your arsenal, you’ll be better equipped to handle the inevitable difficulties of a rough financial patch. Many of these strategies are good to follow even in good financial standing.