Putting bad experiences behind you: How to recover from a financial blip
Here, Richard Waldman, a director at small business finance and credit solutions firm Ashley Finance, advises readers on how to navigate a financial blip and put their company back on the right track.
With Britain stuck in a period of economic uncertainty, there’s a lot on the minds of UK SMEs. In fact, FSB’s recent Voice of Small Business Index for Q2 2017 found that the number of small firms expecting to downsize, close or sell on what is left of their business over the next 12 months has increased for a second consecutive quarter, now standing at 12 per cent, whilst cost pressures have hit their highest level since Q2 of 2013.
Whilst company closures are rarely down to any one reason, a bad financial experience can often contribute to a firm’s decision to downsize or shut up shop by knocking confidence and making a difficult time worse. It can seem hard to look on the bright side.
As cost pressures rise and more ownersface challenges with their business in 2017, it’s important that a business owner suffering from a financial blip doesnt perceive them as a precursor for failure.
A blip in your finances is nothing to be ashamed of, nor should it knock your confidence. Business is never plain sailing, and what normal business doesnt meet a few bumps in the road?
As long as small business owners manage their road to recovery in the correct way, seeking help when needed to keep their head above water there’s every reason to believe theyll come out stronger.
Now’s not the time to panic
Whether it’s a customer that’s not paid a big bill or payments have fallen behind suppliers, it’s clear there are a number of situations that can have a negative effect on a small firm’sfinances. After all, cashflow is the key for any company to succeed and grow.
Although it might sound obvious, a large part of managing the road to recovery is to do with maintaining a positive mindset. Remaining calm is key; don’t panic or dwell on the past. Now is the time to stay focused and forward plan to resolve the issue and avoid the same thing happening again.
Unfortunate things can happen but that doesnt mean a business is destined for failure, or that it’s a bad business.
Seek a helping hand
it’s important not to brave it alone. Not all small business owners have extensive finance departments or teams to guide them, so sometimes you need a helping hand to get you through a tricky time. After all, a problem shared is a problem halved.
Finding the right funding partner to support you in your recovery is key and can be a business? saving grace during a bad financial experience.
For example, the owner of an electrical contracting business came to us when their main customer, who contributed to 80per cent of their turnover, hadnt paid them for two months. They had been a successful business for seven years but this one bad customer experience placed them in a volatile situation.
By seeking help, they managed to improve cash flow immediately whilst they worked with the customer to bring payments back on track. Now the business has made it through the tough times and is running as successfully as ever.