Many small business owners may struggle with cash flow issues when something impacts their ability to operate at normal capacity.
Here are some helpful tips you can do, to help keep your business afloat when times are challenging:
During difficult times, it makes sense to reduce operating expenses by taking a holistic view of your business so that you can identify where saving can be made. Whilst it might be an extremely difficult decision to make, one of those could be to temporarily reduce staff wages and benefits.
Alternatively, you could look at reducing your outgoings on items or services that are not critical to your business. If you are contractually bound to a supplier, it is worth speaking to them, explaining your situation in the process, and asking if they would be happy to reduce your retainer or grant a holiday period on your payments.
These are not easy decisions, but they may be necessary for a period.
One of the most effective ways to retain or attract new customers during a downturn is to innovate with pricing, making your services or products more affordable to your customers.
You could look at ways of offering promotions or reduced rates on products or services you may offer. For example, Pet Businesses could offer a discount for online pet training.
When reducing prices or offering promotions, as a business you need to ensure that these offers will work. If you are a small business, you could look at what other larger companies have done to ensure the promotions or lower costs will be effective and profitable for your company.
The survival of your business may depend on your ability to adapt and evolve during difficult times. You might need to look at how the business can offer its products or services in new ways to suit your customers’ needs. For example, Personal Trainers adapted their business model during the outbreak of COVID-19 by offering online workout classes.
If you trade from a physical premise without an online presence, you could look at creating a website to sell your goods, and even if you do have a website, evaluate whether you can make it easier for customers to order, buy or book your goods.
Some mortgage lenders could offer you mortgage payments holidays for a few months. This can help lower your outgoings if your earning have dropped significantly due to a change in circumstances.
This could provide much-needed help if you need it, however, it is important to note that it will not be suitable for everyone and it will not be free money, you WILL still be charged interest for the time you’re not making payments.
You should speak to your mortgage provider or an independent financial advisor for guidance.
The Small Business Commissioner (SBC) considers complaints from small businesses (with fewer than 50 staff) about payment problems they are encountering, making non-binding recommendations on how the business should resolve their disputes.
The SBC provides general advice and information to small businesses on matters such:
· resolving disputes and dealing with an unpaid invoice
· checking contracts and getting invoices right
· signposting small businesses to existing support and dispute resolution services.
Protectivity is a specialist in niche commercial, leisure and lifestyle insurance. We cover thousands of individuals and small to medium size businesses across the UK, offering a range of tailored insurance products to protect our customers against unforeseen events.
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