By Brittany Fisher
Many businesses run into financial difficulties when the state, local, and national economies hit rough patches. If you've leveraged your business to gain financial support and are now looking for ways to reduce your debt and ensure your long-term financial health, a bit of research and planning can put you on the right path. Tom Scarda can be a resource for exploring your options, whether that’s getting on the right track in terms of financial operations or considering a franchise opportunity.
Take Stock of Your Business
The best way to get your business back on track is to take a detailed inventory that includes assessing your assets and liabilities. You may be able to do this on your own, or with the help of an accounting professional. Organizations like the Senior Corps of Retired Executives can also offer advice and direction on how to shore up business finances. Recognizing where you stand from a financial standpoint, and having a clear idea of what your potential future earnings look like, can better position you for making smart budgeting choices.
Conduct a Line Item Audit
Go through your operating budget line-by-line and look for ways you can cut back on expenses without compromising service to customers. This could mean replacing full-time employees with freelancers or independent contractors, moving to a more cost-effective location, eliminating one or more underperforming product lines, or adding new product lines that have a higher profit margin. Cutting back on nonessential expenditures can also help. This might include a short-term moratorium on travel, entertainment, and even some types of business services. Funding Circle also recommends conducting a cash flow analysis every month to stay on track.
Connect With Creditors
According to Credit.com, if you're having a difficult time paying creditors, stay in touch with them rather than avoid calls and notices. You may be able to work out better financial terms, get a temporary deferment of payments, make partial payments, or even get a reduction in your interest rate or an extension on a line of credit. A financial professional can help you make some of these decisions. Keep in mind: If you end up in collections for non-payment, it can have a detrimental impact on your personal and professional credit, which can make it difficult to secure loans in the future.
Consider Other Business Opportunities
You may find it's a wise investment to look at franchise opportunities as opposed to an independent business operation. While there are franchise fees to pay, there's often collective advertising and marketing pools, as well as the benefit of a recognizable name with an established client base. Do your due diligence and make sure you select an opportunity in which you enjoy the work, and have an adequate amount of support.
Advance Your Knowledge
Consider further developing your business acumen by taking advantage of professional development opportunities in your field, or even going back to school for a business, marketing, or business leadership degree. Online educational offerings make it easier than ever to continue your education, often permitting you to work at your own pace from the location of your choosing. A business degree can also help you augment your skill sets so you are better positioned to understand business functions and operational matters necessary to running a successful company.
All businesses go through periods of ups and downs, and being able to navigate a somewhat tumultuous economic environment is critical to long-term success. Having a business coach or advisor can be an asset, especially if you’re exploring franchise options. For expert insights and access to podcasts, videos, articles, and other information, reach out to Tom.
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