Business Survival Guide – Part 1

We often get asked, what are the most common business problems that we are asked to solve? Every situation is different however there are some common themes that we come across time and time again. Here we outline some of the most common reasons for company financial problems. If you are struggling to cope with similar situations, you are not alone! Give us a call today to find out how we can help.

1. My customers take too long to pay

It’s an old adage, but it’s usually true: ‘Cash is King’. Getting an order, supplying your goods or services, successfully completing the job and raising an invoice: these are all important steps. But until you’ve been paid, it’s all been for nothing. Literally.

Do your customers know your payment terms? Is it clear in your Terms and Conditions, do you print it on your invoices, and do you contact your customer to ensure that there are no problems and to remind them of the payment date, before it becomes an issue? If not, put in place a proper credit control process that starts with the very first contact with your customer and ensures that your payment terms are clear from the start.

If you don’t get paid, you aren’t running a business. You are doing volunteer work for your customers – and the chances are, they won’t even appreciate it.

2. My bank wants to cut my company’s overdraft limit

Overdrafts are not flavour of the month with most banks. Overdrafts cause problems for banks when they are undergoing the Bank of England’s ‘Stress Tests’ and they also may become ‘habitual’ – always in use, rather than being used for a few days each month to cope with cashflow fluctuations. We have seen many banks cut back on overdrafts, either converting the overdraft into a loan, pushing businesses towards other types of finance such as invoice finance, or simply scrapping them altogether (often as part of something that is euphemistically known as ‘re-banking’ – when your bank tells you to go away!)

The good news is that there is a range of ‘alternative’ funders who are often able to step into the void left when a bank decides they don’t want to carry on with your overdraft facility. Does this sound familiar? If so, we may be able to help you to find a new lender, so call us today for a confidential chat about your options.

3. My major customer has walked away (or gone bust themselves)

Relying too much on one key customer is very common. And often, it doesn’t cause any real problems – unless, one day, they stop being your biggest customer and they go elsewhere (or go bust).

This may lead to a re-structure, where you can redesign your business to cope with different amounts of work, for different customers. It may open new opportunities in new sectors and may, in the long run, be the start of a whole new chapter in your company’s journey. But it could also be a very difficult time, leading to sleepless nights and big financial pressure.

If you are coping with the loss of a major customer, call us today to find out how we can help with restructuring and rescuing your business.

4. Some of my employees don’t pull their weight

Employing people is probably the biggest leap any business makes – going from a one man (or woman) band, to a fully-fledged employer, is a big step.

Employees are probably the one issue that business owners are most concerned about: on the one hand, they may be grateful for their employee’s hard work and diligence, and therefore concerned that they can’t ever cope without them.

The other side of the coin is that there may be a feeling that an employee isn’t fitting in, isn’t being productive enough and is putting an unfair strain on the business.

There are no easy solutions. But many HR specialists offer monthly subscription-type services, which allow you to spread the cost of taking expert advice about HR issues whilst making sure that you have the right advice at the right time. Don’t fire from the hip (literally!) but take advice and most important of all, ensure good communication and try to empathise with your employees. How would you feel, if you were in their shoes?

5. We are losing money and my accountant says we can’t carry on as before

This is a common scenario. Your accountant probably doesn’t know as much as you do about your particular industry – but they have experience of looking at lots of different businesses in different sectors. And they know when a business is showing signs of distress. So if they are concerned, it makes sense for you to take a long hard look at where your business is, and where you want it to be.

There are many different ways to rescue a business. These include scaling back to a more manageable size, or closing unprofitable parts of the company. There may be the possibility of selling parts of the business, or merging with another company, where there are ‘economies of scale’ and new opportunities.

As business turnaround and company rescue experts, we can help you to find the right way forward for your business. Call us today to find out more. We can help.