Life Blood = Cash Flow

Plan your cash flow for the next six months. Ensure contingencies are in place for unplanned or pushing creditors. If then struggling to pay,

look at you cash-flow again. Do you require further funding for working capital.

Take great care not to fund trading losses. INFORMATION IS KING TO AVOID INSOLVENCY.

 

Organise and prioritise payments

Differentiating between what you perceive as the essential and less essential costs over the next months will help to project where you inject your money. 

  • Firstly start by condensing unnecessary expenses. These are vital issues to business’ when routinely overspending. You will be surprised how much you are wasting on operations. 
  • Revise ways that you can be more cost-savvy with expenditure whether it is looking at more efficient, low-cost transportation, delaying replacements of equipment or requesting extensions from your suppliers until you have turned your financial instability around.

When in trouble – Crisis Management.

STAY IN CONTROL. BE SEEN TO BE IN CONTROL!

Transparency is crucial to the success of your position in your market. Your clients need informing of issues, ensure that you have a communications plan. Then your target market will receive correct information.

Audit, Re-Organise & Adjust

To restore your company, you need to change things; you may need to build a stronger team. Your team and systems may not be as acceptable as they should be. Gain the help of an experienced professional to work with you, to re-organise your business.

You must always ensure you are ahead of the times with your business. Carry out competitive analysis, watch how the market moves and keep a sharp eye out for bad debt from failing customers.

Ensure you focus on retaining & promoting customers.

Putting more cash into your business is the easiest (If you have the money) way to get your business out of financial trouble. Before doing that ask:-

  • Why have I run out of money?
  • Are we over trading?
  • Is debtor book growth stifling cash flow?
  • Is work in progress absorbing money?
  • Are your selling prices, right-Profit Margin
  • Are fixed overheads too high?
  • Is purchasing department performing to budget?

So before putting money in. Are you throwing money into a black hole?

So revisit business plan, compare actuals to budget.

Next, do not panic. Talk to your Accountant about your figures on a more open basis. 

Look deep at your actual costs and need be, reduce them if possible.

Once you have established a firm footing and understand the way forward with the relevant controls, then put more cash in, raise some money or if need be, seek the help of a Licensed Insolvency Practitioner.

DO NOT KEEP TRADING INSOLVENTLY