[su_dropcap style=”flat”]I[/su_dropcap]T’S A SAD STORY that something like 80 percent of businesses fail in the first year. And it’s even worse that more fail after that.
Companies regularly fail to survive and eventually disappear. But some businesses can be brought back from the brink. It’s just a question of knowing how.
Build Up A Relationship With Your Bank
Involving your creditors in everything that you do can help to build their confidence. When they know what it is that you’re doing, they’re more likely to extend credit in the tough times. Of course, you have to have a good idea and a strategy to implement it. But, as is so often the case in business, familiarity breeds trust.
Companies that have great relationships with their bank can more easily get access to credit when business slows. That gives them some breathing space to find out what has gone wrong. Often companies are making a number of errors that prevent them from moving forward.
Don’t Underestimate Your Ability To Adapt
When business slows, it can become all too easy to become paralysed. Without the money coming in, it can be hard to see a way forward.
But it’s rarely the case that a business that was once successful has no capacity to generate an income stream. Even if you find that your salary has been halved, there is still hope for the business.
Many people worry about how they will make ends meet on a much lower wage. But most people can absorb substantial reductions in their income, at least temporarily.
In business, there will always be times that are leaner than others. It’s just the nature of a cyclical economy. Don’t underestimate your ability to adapt to new circumstances and make the most of them. These are the times when you’ll focus the most on making every penny you spend count.
Go For Voluntary Administration
There is no clear cut line between a business that is solvent and a business that is in administration. Often it’s the case that a business could be viable, were it temporarily in different hands.
Voluntary administration places your business in the hands of an expert. This expert will find out more about your business and come up with a strategy that is best for you and your creditors. Getting voluntary administration information can be very helpful if you’re being chased by creditors. You’ll usually get a month’s moratorium to work out a strategy for the business.
Keep Improving Your Product
Just because your business is on the brink, that doesn’t mean that you can’t continue to innovate. In fact, innovation might be the only way to rescue your businesses.
The trick here is to add more value while keeping the price as high as possible. Adding more value to a product will help close the gap between what you can pay and what you owe.
Often there are obvious ways that you can add value – obvious in hindsight, that is. Have a look at what other people in your industry are doing to get some ideas.