When you run your own business, financial slumps are inevitable. Few companies can start their businesses and keep them growing and thriving from the beginning without any financial hiccups along the way. Starting your own business will always be a financial risk.
The important part of a financial slump is not just the problem itself but more importantly, how you handle the problem.
A minuscule issue can escalate into a financial crisis that could potentially ruin your business if you don’t address it correctly.
So if your business is in a financial slump, don’t panic. Many companies have been in similar shoes. Keep calm and read below for some tips on how to pull your business out of a financial slump.
Don’t Panic — Seek Advice
Although some people work well under pressure, you want to make sure you’re not making any rash decisions based on your rising blood pressure and the fight-or-flight response you’re likely feeling.
Take a breath and try to act out of logic, not panic. Analyze the situation, weigh the pros and cons of possible actions, and take your time to ensure you fully understand the situation. Even consider reaching out to a mentor or financial advisor for assistance. It never hurts to get a second opinion, and it can give you direction on how to best navigate out of the financial struggle.
Even if you can’t cut major expenses without hurting your business, you’d be surprised how much of a difference cutting smaller expenses can make in your financial slump. Here are a few ideas to cut business costs:
- Price shop local vendors when shopping for office supplies. If you let companies know you’re looking for supplies at a discount, they’ll likely give you a deal for doing business with them.
- Compare business insurance policies to make sure you’re getting the most competitive rates. If you’re not, look into switching providers.
- Spend less money on advertising and more time on networking. Use your connections to build up your customer base and brand awareness. This includes taking advantage of social media efforts.
- Consolidate debt with high interest rates.
- Lease your office space to another business for the time being. If you don’t have a large office setup quite yet and can get by with working at home for a while, consider doing so.
Implement New Marketing Strategies
What will always help your business in a financial slump is the increase of cash flow. What service or product does your business offer? Analyze your current market and sales strategy and brainstorm new ways to increase conversion. This could better retain current customers and increase your customer base, which would, in turn, increase your revenue numbers.
Get Additional Funding
A financial slump can happen for many reasons, including low sales, poor cash management, etc. If your finances won’t survive without additional, large-sum funding, you need to speed up your cash flow in another way.
One way to speed up cash flow and quickly is by seeking business funding solutions, such as a business loan, a cash advance, or a business line of credit. Many lenders offer funds in as little as one business day, and there are simple things you can do to improve your chances of getting approved.
Make a Strategic Plan
Not only do you need to plan for how to get out of a financial slump but also how you plan to avoid the same slump in the future.
This is why many companies will tell you they made up their business playbooks as they went along. There isn’t an all-knowing guide for creating a successful business; businesses who learn from their mistakes and plan strategically to navigate similar roadblocks along the way are the ones that make it out alive and thriving.
It’s easy to have blind spots when you’re so invested in the company you grew from the ground up. Your business is likely your focus day in and day out, and being so familiar with something can make you unaware of cracks in the foundation.
When making your plan, consider having an expert come in to audit your business plan and your company as a whole. You want your revenue stream to survive hits and continue to grow as new business struggles come and go.
Having an outside expert come in and give you advice may be what you need to see potential struggles before they happen. A business is only as successful as its business plan.
McCall Robison is the Chief Editor of Best Company’s business blog. She enjoys covering topics related to business and finance, and her work has been featured on Yahoo Finance, Forbes, and Business Insider.