New entrepreneurs are terrified of failure. After all, they just survived a year and a half of business planning time, during which everyone they know was more than happy to cite the famous doom and gloom statistics: 50 percent of all small businesses never make it past their five year anniversary.
As soon as the doors of their business open to the public, or in the case of ecommerce ventures, the pages of their website go live, new entrepreneurs watch every transaction, invoice, and expense like a hawk. They weigh the ROI of everything–from hiring a new employee to buying a new piece of equipment–to make sure it fits into their overall business plan.
But what about after the newness of business ownership gives way to comfort? When you’ve been running the same business for 10 years or more, or you’re on business number three and feel like you could take care of day-to-day-operations in your sleep? This danger zone of complacency is where crisis tends to strike.
Keep reading to learn more about how to cope with a financial crisis in your business and how factoring services from The Commercial Finance Group in Burbank can help mend your balance sheet FAST!
What Really Constitutes A Business Crisis?
Before we dive into our discussion of what to do when your business experiences a financial crisis, let’s clarify what this term actually means: Your business is NOT in crisis because your manager walked off the job or a customer fails to pay their invoice on time. Your business MAY be in crisis if you realize that you don’t have money in the bank to make payroll or send your estimated quarterly taxes to the government on time.
What Should You Do If Your Business Takes A Turn For The Worst?
- Don’t Wait Until It Becomes A Crisis – If most business owners were honest with themselves, they had an idea that something was going wrong on the financial side of things long before everything exploded. The earlier that you recognize and seek help for the problems, even if you don’t know exactly what they are, the more options will be available to you for addressing it. As a business’s financial outlook becomes more bleak, lenders are less likely to a) provide emergency funding or b) be understanding when you ask for flexibility on payback.
- Realize That You Need Help – Although you may be an expert in your particular industry, you’re not necessarily the best manager of your own financial crisis. For one thing, you’re probably part of the reason that the crisis exists in the first place. This isn’t to say that you knowingly made cash flow mistakes, but that at least some aspect of your management (or lack thereof) created the right environment for a downturn in revenue. The nice thing is, there’s plenty of help out there. The Commercial Finance Group in Burbank has spent decades providing factoring services that help companies overcome their financial problems and set the stage for long-term sustainability.
- Seek Out Solutions That Create Cash – As we mentioned above, many business owners only realize that they’re in a bad situation when crisis strikes–they can’t come up with money for payroll, lease payments, or vendor invoices. In these situations, ample liquidity is crucial and every expense must be examined under the microscope. While a traditional bank loan would give you access to cash it also creates debt (a long term problem), not to mention the fact that most banks are loathe to loan more money to a business that’s already in trouble.
Factoring Can Help You Navigate A Business Crisis More Successfully
The Commercial Finance Group in Burbank is here to tell you that there’s a better way. Running into a financial crisis doesn’t mean it’s time to shut your doors. If every business that ran into financial trouble closed up shop, we wouldn’t have a country of nearly 30 million small to medium-sized businesses employing many millions of people. We are a factoring company, which means we can help turn your unpaid invoices into cash.
If you’re owed money by your customers, but simply haven’t been able to collect because you were too busy running the other aspects of your business, we can help. Contact The Commercial Finance Group in Burbank today.
