Any business of any size can encounter financial challenges, be they a product of the industry or due to mistakes and decisions you’ve made within the company. In either situation, it’s not always easy to know how to solve a financial problem once you’ve encountered one. However, challenging doesn’t mean impossible. Take some of the following actions, and you might end up in a strong position despite the odds.
Hire a CFO Consultant
By hiring a CFO consultant to work for your small or medium-sized business, you’re putting your business in a solid position to navigate financial problems that you might not be capable of managing independently. CFO consultants are qualified chief financial officers that can look at your bottom line and draw on their experience to provide solutions. Most CFO consultants can perform cost analysis, vendor renegotiations, and provide expense reduction suggestions.
Negotiate with Vendors
If your business purchases raw materials and goods from other businesses, you might assume that the price you pay is the best price you can expect. That isn’t always the case. Companies generally charge what they believe other businesses and customers will pay, and there might be wiggle room that saves your business money.
Discuss your desire to negotiate with your vendor and shop around to see if other businesses can offer the same materials and goods for a more competitive price. If your current vendor doesn’t budge, you have a secondary option to fall back on that might reduce your overall business costs.
Review Your Employees
Productivity equals profit. The more productive your employees are, the higher your profit levels might be. If your company has long struggled with productivity, look at ways to improve it. You might upgrade the tools your employees need to perform their jobs, improve the working environment, prioritize staff happiness, and use positive reinforcement. A few small changes might be all it takes to see changes that benefit your bottom line.
Recover Outstanding Debt
Sometimes, financial strife isn’t directly related to your business’s missteps. Instead, it relates to outstanding customer debt, restricting your ability to invest in your business and earn more money.
If customers owe you money, put a plan in place to recover it. Sometimes, this involves using a reputable debt collection agency. You might also learn from this process the importance of providing sales agreements before sales detailing the timeframe for paying debt and fees you’ll apply for overdue payments.
Many businesses have assets they no longer need but have also not needed to get rid of. When you’re experiencing financial hardship, now might be the right time to divest those assets and bolster your bank account.
If you have anything of high value you would prefer to maintain ownership of, consider leasing it to another business and make passive income. You no longer have to pay to store it on your own property, but you’re also able to make a much-needed return.
Being in financial strife is never a nice position to be in, but it might only be temporary. Hire a CFO to assist with a strategy, divest your assets, and review your team’s productivity levels. You might then end up in a much stronger financial position than you thought possible.
Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.