Five Ways for Your Business to Overcome Financial Difficulties
Money makes the world go round. That's definitely the case in business. Without it, you'll find yourself closing your doors much earlier than you would like.
Unfortunately, it isn't uncommon for businesses to run into money problems, so you shouldn't feel ashamed if you find that you don't have enough cash to go around. If you find that you're running low on funds to pay the bills, pay suppliers, or pay employees, check out these tips to find the money you need to keep your doors open.
Your Insurance May Be Able to Help
Depending on the circumstances, you may be able to get help from your insurance company.
Business income insurance may be part of your policy. If it is, it is there to provide you with funds should you suffer from physical loss or damage to property as a direct result of a covered cause of loss.
In today's world, many businesses are experiencing financial shortfalls associated with COVID-19, and your insurance policy should be able to help. Additional circumstances where you may be able to get the funds you need to stay open include:
- Fire damage
- Water damage
- Severe winter storms that cause damage
- Unsound findings during a property inspection
- Essential suppliers unable to operate
It never hurts to call and discuss your situation with your insurance company. You may find that you are covered through the duration of the emergency, as well as after while you try to recover.
Sell, Sell, Sell!
Whether you receive assistance from your insurance company or not, you may have to find other ways to make a little extra cash to stay afloat. The best way to get a little extra money is to sell, sell, sell!
That includes taking a close look at your sales department to see where you can improve. It might include additional training for your employees, getting in touch with customers who have purchased from you in the past or creating an online store.
Selling might also include selling some of your business assets. Do an inventory of your business and you may uncover equipment, furniture, and other items that you no longer need that you could sell second hand. It's important to document each item you sell very carefully so you know whether or not you can claim it on your taxes as a loss, or if you have to claim it as a gain.
Create a Detailed Budget
Every business needs a budget. However, if you find yourself low on cash, your budget isn't working for your business. It's time to redo your budget and get as detailed as possible.
First, it's important to understand that your budget is more than just a way to track what you spend. It can also provide you with the ability to make better spending decisions, which is exactly what you need if you're struggling to pay your bills.
As you fill in the details, look for ways to save. Consider different suppliers, services that can be eliminated, and possible reductions in staff or hours worked.
One of the best things you can do if you're struggling with your company's finances is to take the time to become a self-taught finance expert. That's because many financial problems occur simply because those running a business don't know any better!
Read books, take an online course, or go back to school in the evening. Take the time to learn about profit margins, how your market works, separation of capital, and more. Chances are, you'll learn something new that will show you an area of your business that could use a little more attention.
Find New Investors
It's always best to dig deep and find ways to increase your finances from within first, but there may come a point when you have to look outside your business for help. Investors can be a good place to turn.
There are many different kinds of investors who may be able to help your business. Start by digging into your own pockets and consider funding your business from your own personal accounts. Friends or family may be willing to help, while crowdfunding platforms can be a creative way to gather cash. More traditional types of investors, like private investors and small business loans, may be options too.
You aren't doomed if your business is struggling with its finances. There are many things you can do to find the cash you need to continue serving your community.