There are points in our lives where things just don’t go to plan. And it can be a stressful, frustrating, and even crippling situation to be in, particularly if it’s to do with your finances. As unfortunate as it is, money does make the world go round, and the majority of stress that people face is down to their financial situations.
And when you own your own business these stresses are doubled, not only because if it crashes, you’re unemployed, but also because there are other people relying on you to make money and pay them. There are many things that could contribute to your finances getting out of control - bad bookkeeping, overspending, a dip in the market, illness - the list goes on. There are ways that you can help stop these situations from happening, by building a savings cushion, having the right insurance, and keeping your books ordered and on the legal side of things.
But what happens if your finances are getting out of control anyway?
The first thing to do if your money is getting out of control is to get advice from an expert. You can hire a bookkeeper, adviser, or a specialist in your industry, to look at your accounts and give you their honest opinion on how to move forward from here. When running a business, it’s always worth having an accountant or bookkeeper on your payroll, to make sure that all your finances are all organised and up to scratch. One of the worst things you can do for your business is to not record them properly. At the very least, you can then look back and see where the holes in your finances are.
There are many charities out there who can help give you financial advice if you can’t afford to hire someone.
If you’re in debt to someone, if your money issues have occurred because of money owed to you, or any other legal reasons, you should always seek legal help. You can ask for advice on whether you have a case or not, how to proceed and representation if you need it. You can learn more here, but essentially, legal advice is your number one priority if foul play is in action, if you are unable to fulfil contracts or anything that could fall into the realms of a lawsuit.
Look into your budget. Any financial help you have should be looking into this too, to see where you’re spending unnecessary money, where your gaps are and where you can afford to save money. If might be that you need to let some people go, or you might need to rework how you run your business. Sometimes you have to spend a little to make these changes, and if so, you should always weigh the risks of doing so.
Use a straightforward budgeting tool, and stick to it. Find the corners you can cut, and cut them. Like the need for two phones or your company car. Can you go greener in the office to save, and even make money, from recycling and recycled materials?
Supplement Your Income
Finding an extra source of income can help you to stem the tide of debt, or give you a chance to rejig things. It might be enough to make those monthly payments, thus freeing up your regular income to start saving up and paying off in slightly larger chunks. There are many ways that you can bring in extra income.
You can sell some things, whether that’s a yard sale, antiques, land or your car. If you have something that you don’t need that might be able to pay off some of your debt, then it’s worth doing. You can tutor, whether it’s in a school or at home. You own a business, so why not teach others how to start their own business? Give tips on marketing, advertising, management skills? Look for opportunities to earn money online. Places like marketforce.com allow you to become a mystery shopper. Where you might not be paid in cash, the vouchers that you receive will be able to cut into your regular spending - freeing up money for your debts.
Or you may need to look into securing a loan. Business loans are different from business loans as they go against the company rather than you as a person, but it might have to be in your name if the assets of your business are not worth enough as collateral. You can learn more about it here.
It might tug at your heartstrings to even consider it, but it might be the only option left to you. Selling your business can be a slow process if you want to get the right deal, so you need to do the right research. Know the market; get to grips with the business selling market. You need to know how much companies similar in industry, size and profits are selling for. You also want to find the right time to put your business up on the market - if there are a score of other companies the same as yours - then why would a buyer choose yours, especially if your business comes with financial difficulties? Think like a buyer - what makes your business better, what potential does it have, and more importantly, what are the profit and revenue figures from the last twelve months? Be honest with any potential buyers - they will find out soon enough the state of your affairs, and you will gain nothing from hiding it from them.