How to Rescue Your Business in A Financial Crisis
No one goes into business with the goal of failure. Yet, it happens to an unfortunately large amount of businesses. Sometimes you wind up having travelled too far down the wrong road.
It may have been a large problem like incompetent management or a mistake in your strategy. Too many unnoticed small errors can also land the business in trouble. Regardless, the only choice at the end is to sink or swim.
If you are not quite ready for bankruptcy, you still have a few options.
Be Honest with Yourself
Money is one of the most difficult areas to be honest with yourself about. It is easy to make up excuses. Sure, your liquidity might be poor, but look at all your assets! Leave these thoughts behind. A financial crisis is not the time to make excuses about your situation. It is not time to blame the economy or how competitors are driving down prices. Your business may be a reflection of the economy. But, your financial success also depends on your leadership and your ability to be honest about your finances.
The more honest you are about your financial health; the more options you will have when you try to remedy it.
Act Now, But Act Smart
Identify the source of the most pressing issue sending your company into financial disarray. Then, tackle it. Do not dance around it. Treat it like you would a sliver in your foot, and remove it before it does any more damage. This step is hard for many business owners because it may mean making difficult decisions. Yet, in many cases, these are decisions that should have been made long ago.
Try Renegotiation Before the Axe
Once you have identified your critical areas of need, and you made those difficult decisions, look towards other problem areas.
Change Your Business Model
Changing your business model is not the first last ditch attempt to use; however, it is a useful plan. Take a hard look at your current business model. Look for potential updates and improvements to help you get back on your feet, and prevent financial disasters in the future.
“Financial distress does not need to be the end of the road, and bankruptcy should be considered only in the event that there is nothing else to be done. Remember to be honest with yourself about your finances and what got you there. Even if you go under, you will have learned valuable lessons for next time” commented Salomón Juan Marcos Villarreal, president o Grupo Denim.