Overcoming The Financial Struggles When Starting a New Business
Stay Calm, make an assessment and restructure with a better business strategy to cope with pesky financial struggles that keep your business down.
Opening your own business is a challenge like no other.
The hours, the money, the drama… It all takes its toll.
And sometimes, we even face financial struggles and issues. Perhaps we made a mistake, or perhaps it’s just plain old bad luck. Whatever the case may be, know that these things happen and that you need to focus on getting things in order.
There are various methods and ways about how to get out of financial struggles, but they should all focus on two things: re-organization, and mindset.
Keep reading to get a grip on financial struggles your new business may face.
Audit, then restructure
The first thing you should do if you want to get your company back on its feet is to move things around, to shift and to restructure.
Many of the financial struggles new businesses encounter arise due to old systems and processes that do not lead anywhere. These systems are, perhaps, outdated. They are not applicable to the current market, or perhaps any market at all.
Sometimes investing in a little training, and a bit more education, to get up-to-date in your business processes can make a world of difference.
Is your business structured correctly?
Your business hierarchies and divisions of labor may not be the most useful or cost-effective. This may have caused you to bleed money or at the very least reduced profit margins.
In order to get these issues under control, you should think long and hard about your business structure.
Then, ask around for advice, speak to more experienced entrepreneurs and businessmen in your field. A great place to turn for help would be a professional CPA near you. Read, educate yourself further. There is no real solution one article can provide since every business is different. You now know what to focus on, it’s up to you to actually figure it out. You can, of course, get some assistance, and hire an expert who specializes in work like this.
Re-organize your payment priorities
So you’re in trouble, but you still have bills to pay, and loans to settle.
This is why you need to see what bills, loans, and expenses are absolutely necessary to be settled in the next week, month, quarter, year, and which, well, can wait. The reason here isn’t just saving up money, but actually moving money away from unnecessary things, and moving it into your cash flow.
In order to pull through, in order to really get your new company to stay in business, to survive longer than the first month, you need to trim the fat.
The first year of any new business is tough, and you want to overcome any financial struggles you face.
Dealing with any loans you have will be priority number one.
You’re lucky if you got good low rate personal loans, but are in trouble if you got a bad deal with business loans where the interest is high. Unfortunately, this can be pretty common with new business loans.
Cut out things that are eating away the budget.
Try not to overspend, and resist any urge to buy and to splurge on needles stuff. Many new business owners have this image of a perfect company, not only in terms of operations but even in looks. No, you don’t always need the best espresso machine, that fancy fountain, or the best possible chairs.
Finally, know where to inject your money.
It’s still early to experiment, and maybe that pet project can wait a while, while you focus on your cash flow. Keep your eye on the prize, strengthen the basics, and later you can break new ground.
Keep the customers you have
The most important thing that can keep you afloat and out of trouble is money. Or rather, regular injections into your cash flow.
This is why you need to keep any customers you have made in your company’s short life (if you want to make it longer). Namely, your customers are your lifeblood, they allow you to continue operations. This is quite obvious, but what isn’t obvious, is that you need to focus on keeping the clients you have in times of trouble. Later you can focus on getting more, but for now, try not to lose any. Collect any debts and outstanding payments they owe you.
Furthermore, try to at least present yourself as calm and collected. They will probably notice that you have financial difficulties, but if you show that you are still in control, they won’t hire somebody else. Don’t throw any pity parties, and show them that they will have the same level of quality for the services and/or goods you offer as before. If they like you, they may throw a bone your way and recommend you to their friends (which is something you should aim for anyway).
Focus and calm down
Following the previous tips, you should remain in control, not just present yourself that way.
Yes, we know, this is not something you want to hear. However, keeping a clear head and focusing on the big picture may just be the thing you need to stay afloat. Find a way to distress. Being constantly on edge will just get you to make more mistakes. Workout, eat well, things, you can even meditate, or do yoga. Find a way to, if not relax, minimize negative emotion and drama.
Remember why you are doing this, always keep your big, grand goals in mind. Know that this is just a stepping stone, something every entrepreneur faced. Look at it as a learning experience, as something that will toughen you up, force you to become better, stronger, smarter. Keeping your head in the right space is key.
Financial struggles are something every business faces and is nothing to be ashamed of. Even if it’s at the very beginning of the company, it still happens. Remember to focus on the things that matter, on issues and problems that, while difficult, can be overcome. Focus on the big picture, stay calm and in control. Keep the clients you have, and restructure if needed. Trim the fat and get rid of any excess expenses, and you will certainly, with just a little bit of luck, pull through.