As an entrepreneur, you probably already know that while you may consider the factors at play in making your business successful some things are simply out of your control. It’s like farming – you can plant the best seeds in the most fertile land, but you can’t predict the exact weather patterns or the insects and diseases.
In this case, things such as future economic conditions and employee behavior remain elusive. Here are six tips to help keep your business afloat at times of financial hurdles.
1. Analyze Your Cash Flow
Trust but verify – get hold of your checkbook and inventory to ascertain that every single coin goes into the right pockets.
Employee theft is a common case, especially when businesses ignore measures to prevent workers from stealing. In 2017, for instance, two employees at a Malawian water board made away with $1.7 million by making cheques payable to themselves. And had they not been discovered, they would have stolen double the amount.
2. Reduce Costs
- You might have to sacrifice some expenses such as travel, parties, or company retreats.
- Make the tough call to reduce the unnecessary employee hours, compensation, or lay off some workers.
- Postpone capital expenditures such as purchasing expensive equipment, a new building, etc.
3. Prioritize Your Payables
When making payments, you want to begin with obligations that keeps your business going – like paying salaries. The last thing you want is useful employees quitting. Then make payments that could result in penalties – like taxes. Late payments should come afterward and lastly, those that are not urgent.
4. Ask For Concession
The worst mistake you can make is hiding from creditors. Call and explain the situation. They will be willing to work with you, especially if they know that you’ll eventually pay or that they could get nothing if you declare bankruptcy.
5. Leverage Technology
Look into the possibility of employing technology to smoothen operations and cut on costs, even if it means laying off some people. Foss Business Solutions gives us a case study of an IT services firm from Cleveland’s Eastside that was able to save $1,500 a month through software that imported transactions and lists from Excel into QuickBooks.
6. Consider Financing
Sometimes looking for external financial help is necessary. Luckily, nowadays there are many options to choose from. Just be keen to go with the most favorable solution. A microfinance platform such as AssetStream where you get to set your own terms would be great!
AssetStream is a microfinance platform that is based on blockchain technology, where borrowers and lenders meet to agree on terms or have the matching system pair them up. As a borrower, you get the following benefits.
- You can decide on the amount, the interest rate, and the duration, then the system will match you with a lender, or the lender can find you manually.
- You will be rewarded with a badge whenever you pay back in time, which will increase your credit rating.
- You’ll enjoy transparency because the smart contracts operate in real time, there is no middleman, and the payment is almost instantaneous.
- The transaction costs will be lower because AssetStream is using the existing infrastructure.
This platform is creating an unprecedented level of trust and security between borrowers and lenders, beginning with borrowers from Thailand and the South East Asia region.