Businesses In Difficulty July 16, 2019
Business

The Solution

The way to cure a patient is by diagnosing the disease and subsequently treating by the right medication. Treat your company like a patient.

Run Through

Have a close look at your business. Have you been avoiding it? Are all the key decisions left upon managers? Do you know each and every minutest detail related to the function, if no, then the reason behind such difficult position can be attributed to the lack of apt management and close monitoring.

In fact the first guide to drive your business out of difficult times is to know the root cause of such positioning which can be clearly assimilated only by engulfing every detail about your enterprise.

Now that you are aware of the details of the hour, plan a course of action to deal with it. Two simultaneous plans, one in long run to deal with the key issue and one in the short run to improve cash flow, run parallel.

Long Term Course

The root cause has been deciphered, the key term here is root cause (do not focus on the upfront issues rather dig for more crucial factors back stage), now sit back and make a strategy to deal with it in the long run.

Make sure that all the points have been thoroughly considered and based upon the analysis a plan has been made. The same can be implemented once the cash flow situation has been improved by various immediate steps as entailed in the short-term course.

Short Term Course

Deal with the immediate cash flow crunch. It is time when you should be especially careful towards your creditors. Deal them with patience. Remember, at the end of the day they too are interested in their money. So just squeeze a little more time.

Quick note: Never let a single creditor or a specific group of creditors own more than £750, as if otherwise it gives them an opportunity to take you to court and wind up your business.

Improve your cash flow positioning by

  • Trim your assets and working capacity
  • Have a leaner structure and cut management costs.
  • Deal with your debtors on immediate basis, if required sell off the loans to third parties.
  • Sell un-required machinery and other assets.
  • Look out for cheaper sources of cash
  • Bill at the earliest, raise all your pending or due bills
  • Re negotiate with suppliers for better payment terms.