Sometimes the writing is in the sand as it were. The future of your company looks bleak, you’re drowning in problems incomings and outgoings and it looks as though you may have to close your company. What can you do? How can you save your company?
Unfortunately there is no golden ticket, or secret solution, otherwise no company would ever go bust. However, there are a few quick fire and strong decisions you can make to a company the best chance of survival.
Look at everything coming in and out
Your incomings and outgoings will define the success of your company. Simply put if you have more money coming into the company than going out, then the business should survive. If you have more going put, then it’s unlikely your business will last long. However, it’s not always this simple. Sometimes it’s possible to have massive amounts of money incoming, but you can still be in the red, simply put, cash is king and if the money doesn’t come in fast enough you can’t pay your outgoings.
Monitoring the way that money comes in and out of the company, will give you best shot at surviving in the long run. Having a system so you know what take home money you have every month, quarter or year will be massively helpful when it comes to staying afloat.
Look at payment plans and additional credit
Receiving additional extra credit just for the sake of it, won’t help your business. If you’re company is set to receive extra credit, it has to be spent wisely and for the right reasons.
If what you have in your bank won’t help stretch you past your outgoings for one month, looking at commercial finance as a temporary cash injection can help you with your cashflow month to month. Commercial finance can be used in a multitude of creative ways, taking out small loans based on the value of your assets, to receiving money for unpaid invoices. As an option, it should be used more as a preventative measure to stop your company going bankrupt and helping you with your cashflow.
Additional financing isn’t always an option, or sometimes it won’t give you the benefit you need. In cases like this, a formal repayment plan might be the best means of moving ahead. A repayment plan can pool your creditors and allow you to pay them all on a monthly basis. Not only can this lower any outstanding debt, but it also gives the company protection from creditors and receiving any further action.
But when is it time to walk away?
If you find that your company is insolvent, it’s important to first act as quickly as possible. Taking action, whether it be repayments, incomings and outgoings or seeking professional advice, the longer you do nothing whilst having company trouble, the more problems you’ll have.
If you’re too deep into the red, sometimes it’s simply better to walk away than to try and save something that’s beyond help. Even when you gain additional finance, or look repayment plans, sometimes it just won’t work out. In this case putting the company to bed and closing it down is the best option for all parties.
Summary
As a business owner, if you find the company in trouble and suffering thankfully, there are means and ways of getting yourself out of trouble. Your first and best option is to always look at your business and see where and what improvements could be made. If it’s not a problem with your business model, but an injection of cash is what will benefit you, then look at formal repayment plans as a way of getting yourself back on track.
