Businesses rarely ever experience straightforward paths to success. As a business director, you will expect to face both ups and downs, and if you find that your business is losing money, that does not mean it’s the end of the road. There are plenty of different business rescue techniques that you can use to put the brakes on financial loss and start stimulating growth again.
Assess The Root Cause Of Your Problems
Before any changes can be made and you can begin figuring out how to turnaround a loss making business, you need an accurate understanding of the whole business landscape. Where are things going right, and where are they going wrong? Are your costs too high or too low? Are sales declining due to internal or external factors? A full cash flow analysis and a profit and loss review will help get started with understanding the circumstances your business is facing.
Take Immediate Measures To Stabilise Cash Flow
Start securing quick gains to stabilise yourself in the short term. Cut down as much as you can on non-essential spending and pause or negotiate any leases you have. If your workforce is bloated, you may have to reduce hours or cut staff to make ends meet. Do what you can to keep as much of the money coming into the business as possible. A strong cash reserve is vital during difficult periods like this.
Consider CVA As A Solution
CVA, or creditors’ voluntary arrangement, is a business rescue procedure that can be immensely powerful if used correctly. In short, a CVA is a contract between a company and its creditors, whereby an agreed payment plan is created to allow the company to pay back some or all of its outstanding debts over a set period of time. Directors will have to draft a CVA proposal that 75% of creditors (by value rather than number) agree to. This can give you crucial breathing room to allow the company to begin growing itself again.
Administration Can Protect Your Business
If immediate protection from company creditors is needed, placing your business into administration could be the right call. Administration places an automatic stay on any legal action and gives control of the company to an appointed administrator for 12 months. During this time, the administrator will work to rescue the company and provide an optimal outcome for its creditors.
Restructure The Business To Suit The Situation
Reshaping your business model to better suit your circumstances can dramatically improve your long-term viability. Strategically restructuring by shifting to more profitable markets, renegotiating debt payments, and selling off underperforming assets can all help you with your business turnaround and stimulate company growth again.
Call In Help From The Professionals
If you’re struggling with financial loss or want to learn more about how to turnaround a loss making business, get in touch with us. Ballard’s Business Recovery has extensive experience in providing tailored business rescue solutions for companies struggling with financial loss. The sooner you seek professional help, the faster we can get your business back on track, so don’t hesitate to reach out.
