If your business experiences a financial setback, it’s important not to panic. Take stock of the situation and use your energy and resources to drive through business problems that arise.
Quick takeaways if you’re in a hurry
- Setbacks are temporary and need to be put in context
- Dealing with setbacks will require a period of extra hard work, including leveraging your network as much as possible
- Keep a close eye and control on any money going out of the business until you’re back in control.
Read on: Prepare to persevere: dealing with business problems
(estimated reading time: 5 minutes)
Most business owners can tell you stories about the financial setbacks their business has survived. So what does experience recommend that you should do to deal with financial hurdles? We look at 11 tips for surviving setbacks and getting your business back on track.
1. Setbacks are not forever
When you encounter a setback it’s important to remember that it’s only temporary. You have the ability to get things back on track. Create a list of everything that works well for your business and use it to remember the positives. You can refer back to your list any time that you are struggling to see the wood from the trees.
2. Embrace change
You need to take action to overcome this setback. Don’t waste time overanalysing how you got to your current predicament: adopt a positive attitude and try to look upon this as an opportunity to make some positive changes.
3. Work harder than your competitors
Overcoming your issues is not going to be an easy ride. If you’re finding it hard to get motivated then you can use your awareness of the competition to keep you going. How hard are they working to look after and grow their customer base? Now take your highest estimate and double it – that’s how hard you need to drive yourself to turn your business problems around.
4. Use your network
Your network is very valuable to your business and never more so than when you are in a time of crisis. Use your business coach and/or mentors to gather together all the advice you need to get you past your current hurdles.
This is also when it’s crucial to leverage your existing relationships and contacts to explore new business opportunities. There’s no need to spend hours pulling together a big pitch document. Just make contact and let everyone know that you’re looking for the next big opportunity. And don’t forget that you will need to be ready to help should the shoe end up on the other foot.
5. Think your way through the problem
If your find your business has been knocked off course by a financial setback, you shouldn’t miss the chance to review where you are and where you’re trying to get to. This could be exactly the right time to review your product and service. Don’t be afraid to consider changing what you do and how you do it, or you could just make sure you do the same thing even better.
6. Tighten your belt
If your finances become tight it’s important to stop any spending and carefully scrutinise all of your outgoings. Make sure you don’t release any unnecessary funds. Focus on the details: little costs add up to big ones and risk causing you further issues. Keep it straightforward and try not to spend money on anything until you get past your current setbacks.
7. Follow your invoices
Closely watching incoming cash is just as important as tracking what goes out. If you hit a financial hurdle the last thing you need is an unpaid invoice. It’s your responsibility to ensure that invoices are issued on time. Keep in close contact with your customers and make sure you remind them when their next payment is due.
8. Prioritise bill payments
Failure to pay your bills can impact your business’s credit rating and reputation, and should be avoided at all costs. But you can review your payment terms and prioritise the bills that are most important while leveraging your payment terms on others. If you think you are going to miss paying a bill then contact your supplier straightaway to discuss your options.
9. Get financial help
If your business experiences a financial setback you may need a cash flow boost to help you get past it. Contact a Fifo Capital Business Partner for help. We can review your cashflow position and suggest the best short term finance solution for your business.
10. Don’t forget your customers
No matter what the financial bump is that may affect the rest of your business it’s important to protect your position with your existing customers. Prioritising time with your customers could protect you from losing them in the future.
Staying in regular contact with existing customers is also a great way to identify and develop future opportunities for your business growth. Take time to find out what you could do even better.
11. Prevention is better than a cure
If you’re reading this and you haven’t just experienced a financial setback; you might like to stop and take stock. There’s never been a better time to review your business and find the areas that might be at risk. Develop some action plans to address any problem areas identified, and find a way to protect your business from future setbacks.
Coming up against a financial setback can feel like a disaster, but with some careful planning and a lot of hard work you can turn around the challenges and bring your business back on track. Take time to look after your customers and plan for the future while you deal with today’s challenges. You may even emerge more successful than before.
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