There’s no denying it, times are pretty tough for businesses in the UK right now. This month, we’ve already discussed the pressing obstacles to business growth and the fact that rising numbers of companies are being registered as insolvent. If you are a struggling business owner, all of this doom and gloom will understandably make you feel overwhelmed.
At Ballard Business Recovery, it’s our job to help struggling business owners understand their next steps. Being proactive and taking decisive but informed action is the best approach if you want to boost your resilience and weather the storm, and we’ve outlined our recommended next steps if you’re ready to tackle your struggle head-on.
Don’t Panic
It’s always easier said than done, but we cannot understate the importance of staying calm when your business is struggling. Panicked action could quite easily worsen your situation so take a step back to allow for a clear head before making any decisions that may affect the future of your business. By staying calm, you’ll be in a better position to assess your situation objectively and identify the best course of action as you work through the rest of the steps on this list.
Know Your Numbers Inside Out
One of the biggest mistakes that struggling business owners make is not having a clear understanding of their financials. Knowing your numbers is crucial, particularly in a turbulent economic climate. Start by conducting a thorough cash flow analysis to identify how money is moving in and out of your business and, crucially, whether there are any immediate issues you can address. Even if your business is profitable on paper, cash flow problems can strain your business and you may be able to move some payments around to relieve short-term pressure.
Identify Ways To Cut Costs
If challenges are arising due to a drop in demand or revenue, finding ways to cut costs is a very logical step for a struggling business owner. You may be able to do this by temporarily cutting back on non-essential expenses, negotiating with or changing your energy supplier, outsourcing particular duties and reconsidering your physical space. However, it’s important to think strategically about where you make cuts. Steer clear of cuts that may affect your operations and external relationships and be mindful not to cut too deeply into areas that are critical to business growth, such as marketing. A balanced approach is key to making sure your cost-cutting measures don’t damage long-term recovery.
Be Open With Creditors
If your business is struggling to meet financial obligations, the worst thing you can do as a struggling business owner is to ignore your creditors. Your debts will not simply go away overnight and avoiding conversations with creditors about them can escalate problems, potentially leading to legal action or damaged relationships. Instead, proactively communicate with your creditors before the situation worsens. Most creditors will appreciate transparency and will often work with you to find solutions, such as extended payment terms, temporary respite, or debt restructuring. Showing that you are taking active steps to improve the outlook of your business can also go a long way in gaining or regaining your creditors’ trust and cooperation.
Seek Professional Advice
Business owners can often feel like they have to solve everything on their own, but looking outwards is vital if you are a struggling business owner. Professional help from a business recovery expert can be the lifeline that your business needs, opening your eyes to insights and strategies that you may not have considered.
At Ballard Business Recovery, we specialise in helping struggling business owners navigate difficult financial situations and can provide you with services and advice ranging from restructuring to insolvency advice. The fresh perspective provided by our business rescue experts might be exactly what you need to feel more confident in the current economic climate, whether that’s through the tough love you need to make difficult decisions or a new awareness of opportunities to secure the future of your business. Don’t hesitate to get in touch today to discuss your options.
