Periods of economic instability can take their toll on both individuals and businesses. The latter will need to think more strategically about how to adapt and cope under these less predictable circumstances. This often involves making some tricky, well-thought-out decisions.
It’s normal for small businesses to adapt to changing environments, whether this revolves around supply chain disruption or changes in employees working at home or in the office. Official reports can help identify trends to see how events and attitudes are changing over time. So, what kind of decisions will businesses need to think about during tough financial periods? Here’s what you need to consider.
Tips you can implement to help your business in times of economic hardship
Payroll tends to be an important priority when reviewing a company’s finances during tough economic periods. It is sensible to ensure you have the right people on board to help the business run as efficiently as possible. The last thing you want is for an individual to be holding you back due to a poor work ethic or a lack of commitment. Teamwork is crucial here.
You should make sure you can access cash without difficulty too. This might involve having several sources of capital available, whether that’s a loan that has been pre-emptively secured, as well as savings or support from family members where appropriate.
While it’s widely known that individuals can improve their credit scores, which can be made easier with smart savings accounts with 0% APR loans, so too can businesses. A healthy business credit score means you can apply for finance and investment to help keep your company stable. If you’re able to save your business money through funding accessed in this way, it could make you eligible for lower interest rates and other benefits.
Often, looking at finances at a more granular level can help you identify areas where you can save costs. Look at them on a quarterly. Monthly and even a daily basis to see whether there are underlying problem areas. You might benefit from switching suppliers for example or selling certain assets to help maximise capital under the current circumstances. Having healthy cash flow means being proactive and weighing up what might be best for the long-term success of the business.
Some small business owners might benefit from compiling a trusted ‘board’ of people they can trust. This way, you can get a second judgement on any decisions you’re faced with. Put a good level of thought into who would be suitable.
Ultimately, it’s important not to get too emotionally attached to your business and the way it functions. If something fundamental is going to prevent it from staying afloat in times of financial hardship, you’ll need to be brave and make those changes.