Running a business is a task that is, at times considered as gargantuan as reaching the Mt. Everest. More so, when the stakes are high and you’ve got just a single chance to make it work. From managing the resources of your firm, to building a network, to working on the sales and marketing, to handling the finances; running an entrepreneurial venture isn’t a cakewalk. But if you ever ask us, “What is the most difficult task in running a business,” our answer would be plain as day: Handling the finances of your firm during a crisis.
For a large number of businesses, getting the financial support and investments is considered easier than actually managing them. Dealing with your company’s financial assets so that your business stays afloat even during high tides is the art that separates the good ones from the crowd.
So, if you’re still not certain about what you’d do when your venture gets stuck in a financial crisis, here are 5 tips to help you tackle the same head on!
1. Seek for a mentor and communicate with your team
A philosopher once rightly said, “The best way to become successful is to research and value what others did to reach where you want to be!” Take this to be the golden rule of life, and start reaching out to people for the same. While in the midst of a financial crisis, you might come across situations, which may not be completely familiar to you. This is where financial experts and mentors in your field come in.
History is proof that mentors have guided people to set sail in the right directions. Did you know?
- Warren Buffett, the owner of Berkshire Hathaway was mentored by Benjamin Graham
- Merrise Meyer, the current CEO of Yahoo was mentored by Larry Page himself
- Marc Benniof, the chairman of Salesforce.com was officially mentored by Steve Jobs himself!
Getting the right guidance from someone who is experienced in your field does help you deliver better. However, another important issue at hand is talking to your team. When the captain sees his ship sinking, he doesn’t handle everything on his own; he believes in keeping a unanimous front to fight the issue together. Bringing your team up to date with the issues at hand helps in two particular ways:
- It helps in relieving a little stress off your shoulders.
- It helps get suggestions, support, and advice from the entire team.
2. Try moving to Debt Consolidation
If you’ve been running your own firm, and you’re not aware of the term “Debt Consolidation”, you really need to read what we have to say. Consolidation, as the word suggests allows a person or a business to take a single loan to pay off a number of smaller loans, debts, or bills.
Taking a debt consolidation loans to pay off all other debts may seem a little illegitimate to become with, but there are many benefits attached to it.
- It simplifies your finances. Instead of handling a number of debt payments, you’d only be required to answer to a single bank/debt company.
- It can save money by reducing the interest rates.
- It reduces the payment amounts per month. Paying to a number of different firms together takes up more money as compared to a single payment per month.
So, if your business is ever in a crisis, consider taking a father of all debts, to tackle your single debt trouble.
3. Hire the experts in consolidating credits
Now, the big question arises, “How do I consolidate my credit?” There are a number of such organization and experts handling and helping firms as well as individuals in getting their credits consolidated.
For instance, you could get a Line of Credit from a bank or a credit union. It allows your firm to take a line of credit (as the name suggests) and repay it every month. Another way of going to an expert is reaching out directly to a bank or a credit union agency. There are separate banks directly doing just that.
Financial firms such as Goldman Sachs, GE Capital, etc. also help in crediting and consolidating finances. The advantage of using financial firms is that they allow easier lending stringencies as compared to banks. But they also charge extremely high rates of interest. Baird, a capital market company charges as much as 47% interest on the debt collected.
4. Review your expenditures, and reduce spending on conventional media
“The more you have, the more you’d spend!” Entrepreneurs and Business owners take this extremely seriously at times. As stated earlier, getting investments for your business is easy, but what’s difficult is managing them.
Research shows that companies waste as much as $14000 per year on redundant expenses. And these are directly the cause of financial crunches that such firms face. Another major factor causing affecting expenditures of a firm is the conventional modes of spending that a firm does.
A conventional newspaper advertisement in The Washington Post costs anywhere from $163,422 for a full page ad; on the other hand, an advertisement on a social media website (such as Facebook, Twitter, etc.) costs much less. Such statistics show a major difference in the expenditure rates for conventional and comparatively newer forms of media promotions.
5. Reduce your workload, and downsize your startup if it comes to it
If you’ve had any experience in the world of business, you’d know that working on a particular project may at times cost more than the returns that it provides. Following this ideology, during times of financial crunch for your business never take on too much work and try to reduce the burden. This provides a two-fold benefit: Apart from the aforementioned cost implications, it also helps you to focus on the matter at hand, i.e. handling your finances.
Final wrap up
With these quick tips, we’re pretty sure that you’d be able to survive the atrocities on the world of business, but only if you follow all of these with caution. One wrong step in the startup Universe could cause more trouble than you could ever imagine. And, to conclude, we’d like to say that never lose hope, and stay focused towards what your goal is. Your business would stay afloat, for sure!