Navigating Financial Stress: Practical Steps for your Business

The key to successfully weathering financial pressure is to stay proactive, stay calm and be prepared to make tough decisions. Please note that I am not a financial advisor — always seek professional advice from your accountant or another professional, before making decisions that will affect you and others. Best wishes.

1. Seek expert professional advice
   This is always the #1. It is not a sign of weakness in any way, yet actually a sign of strength that you recognise that you don’t have all of the answers at this particular point in time. It’s also an investment rather than viewing it as a cost.
2. Never hesitate to seek advice from a Financial Advisor, an Accountant or a business mentor/advisor. They can help you identify areas where you can cut costs, increase revenue, or offer guidance on potential financing options. Also, if you’re eligible for any government funding or grants, they can help you navigate the application process.
3. Evaluate your cash flow — Know your Numbers
   Cash flow is the lifeblood of any business and is most often not part of a business’s weekly Must Do’s.
4. Without it, you won’t be able to pay bills, cover payroll or invest to grow. Review your current cash flow situation to identify areas where you can reduce expenses or increase revenue.
5. Develop a cash flow projection for the next few months to identify any potential shortfalls in cash and plan accordingly, then monitor this on at least a weekly basis in order to adjust your strategy as required.
6. Evaluate your business model
   Don’t be afraid to step back and consider whether your revenue model, products, pricing, supplier relationships, sales pipeline funnels, degree of automation, use of technology, or even business partnerships are suitable. In addition, evaluate the larger economic environment and market conditions. Please always consult a professional before making any decisions.
7. Increase revenue
   Are there ways to grow your revenue, whilst minimising risk and ensuring that it’s sustainable (e.g. not loss leader)?
8. Consider new products or services that you can offer, expand your customer base, consider increasing your prices or embark on a marketing campaign to increase your visibility that you can analyse your ROI (Return on Investment) for every dollar and if something is not working, quickly stop it.
9. You could also consider renegotiating better payment terms with your customers or selling off excess inventory.
10. Review and consider cutting expenses as required
    Once you have evaluated your cash flow, look for ways to reduce expenses. Consider renegotiating contracts with suppliers, reducing staff or employee hours, reducing or eliminating non-essential expenses or looking for cheaper alternatives for necessary expenses.
11. Be cautious not to cut too deeply as that may have a long-term impact on the business, therefore as with any decisions, consult your accountant or another suitable professional.
12. Seek additional capital investment
    If you need additional capital to cover expenses or invest in growth, consider seeking financing options (a small business loan or finding an investor). Make sure you have a solid plan in place to use the funds wisely and increase your chances of success — as always consult with your accountant and other professionals in this field, before making any decisions, especially where borrowing and debt are concerned.
13. Consider your options
    As with #3, it’s not a sign of weakness to decide that your current business isn’t the right one for you. Seek advice and assistance whenever making decisions, rather than making a quick decision that may not have been thoroughly thought through.
14. Best wishes.

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