It’s the nightmare scenario for CEOs, accounting people and employees alike: your company’s latest profits are in, and the outlook is grim. Chances are, if you don’t step up your business strategy or deal with some weaknesses in the company, you’ll slip into the red and stop being profitable, which is a potential disaster for every area of your company. Being in the red financially could mean layoffs, downsizing, and possibly even administration if it gets bad enough.
Luckily, there are plenty of things you can do before that happens to make sure your company stays well out of financial trouble. There are always improvements to make in your business plan, savings you can examine in each department of your company, and clever workarounds that you can implement to ensure fiscal solidity going forward. Here are a few pointers to help you avoid your company falling into the red zone.
Get yourself a loan
It might not feel like the most obvious way to lift yourself out of financial difficulties, and if you’re seriously deep in debt, this won’t help you. If, however, you’re struggling one month and just need a bit of a cash injection, a loan might well be the route to take.
Trustworthy companies like Trust Two offer great loans at good rates, so even if you’re looking to just get a personal loan for a small business to keep it afloat until the next month, there are plenty of options for you if this is the route you want to take.
We all know how bad the January blues can get, and it’s no different for companies. If you’re in a slump post-Christmas and you need a pick-me-up, seriously consider taking out a loan. Remember, though, if you’re not able to make repayments, this isn’t a sensible option.
Find new ways of thinking
All too often, companies are tripped up by maintaining the same business logic that got them into a certain situation. We’ve seen companies steadfastly refusing to change their business model or find new markets, even as their old ones are failing them. When clients fall away, customers look elsewhere, and money starts to disappear, the best thing you can do for your company is re-evaluate what it is and what its strategy should be.
Obviously, we’re not saying your business should change entirely, because that just might not be possible. Looking at “sideways” options such as branching out into related markets should always be on your list, though. Put simply, don’t pigeonhole your company, and you might find profits emerging from unexpected places.
Be realistic
If you’re finding your company consistently slipping into the red, the worst thing you can possibly do is deny it. Denial massively impacts your business strategy in obvious and subtle ways; if you’re making the same business decisions and trying to throw money around that you just don’t have, your clients will notice it quickly and move on to someone else.
You need to be realistic about what’s happening to your company. Another way you can put this realism into practice is with your turnaround strategy. If you try to implement a massively overambitious plan for bringing your company’s profits back up, you’ll only find yourself faltering when the scope of the plan proves greater than its reach.
Talk to your employees
Your employees can be a real Litmus test on how the company’s doing overall, so you should be speaking to them on a regular basis. When times are hard, it can feel difficult to face your workforce, especially if it’s so bad that you might have to start downsizing soon. These are the times when it’s most important to discuss what’s going on with your employees, though, for a number of reasons.
First off, nobody likes to be left in the dark; imagine yourself in your employees’ position, hearing rumours and whispers around you but not being able to figure out exactly what’s happening. Secondly, often the best ideas for saving your company and getting back on track can come from unexpected places. Talk to people in all kinds of positions and on all kinds of levels at your company, because you never know who might be deserving of that promotion once things get better.
Identify weak links
It might sound harsh, but the reason your company is underperforming could well come down to personnel. Nobody likes to make cuts, and nobody enjoys telling people they’re out of a job. In the end, though, there might be staff members at your company who just aren’t cutting it anymore for one reason or another.
In that case, it’s kinder both for the company and for the individual themselves to let them go rather than let them linger. It’s not just human resource weak links, though. Do you have any suppliers who consistently fall through for you? Are your contacts in need of an overhaul? Look for places in your company where you can improve workflow, and you’ll reap serious benefits further down the line.