Take rapper Kanye West as an example. Inarguably one of the most famous, talked about musicians of his generation, yet coinciding with the announcement of his new album he revealed that he is $53 million in debt. Seeing an artist whose music and fashion sales generate millions of dollars a year reaching that point is a good example of how fragile someone’s financial position can be.
The situation can be even tougher for entities who don’t have a high profile like West. Dun and Bradstreet’s New and Failed Businesses report for the final quarter of 2015 found that 12,170 Australian companies failed in the three months to December, a decrease on the previous quarter but still a troubling figure.
If your own business finds itself in a situation comparable to Kanye West, there are techniques you can employ to improve your fortunes.
1. Shift gears with a restructure
When you are facing difficult financial times, it’s important to prioritise which of your financial obligations are the most pressing and address those first. Taking another look at your budget and revenue forecasts can help you to get a better overview of where your finances are heading, and identify some areas that some savings could be made.
Research firm McKinsey & Company suggests that cost-cutting initiatives can go beyond making small savings here and there. For some businesses, considering a wider restructure may be a bold choice, but to take advantage of trends in the market or follow informed predictions of where the industry could go, it’s one that could pay off in the long run.
This kind of agility is a defining feature of successful companies such as Nokia, who built themselves up from humble beginnings as a paper mill operation into one of the most successful telecommunications manufacturers in the world. By shifting focus and priority to meet the needs of the market, agile businesses can avoid being left behind by the ever-evolving world around them.
2. Keep an eye on incoming finances
Amidst the stress of dealing with your own financial problems, it can be easy to overlook the everyday operations of your company. Business Victoria offers a range of tips for small businesses dealing with common problems, and at the top of their list is making sure your business is still receiving payments.
One way to improve your financial position is to contact any people or organisations that owe you money and do everything you can to recover those outstanding invoices. Ensuring your cashflow is continuing to move in both directions seems like a no-brainer, but when you are operating under stressful conditions you may find yourself missing some of the fundamentals of your business.
3. Seek counsel about your next move
No one likes to go through challenging times alone, but the good news is when you are facing financial difficulties you don’t have to. Even global music superstars have to sometimes admit they are struggling to manage their money, so there’s no harm in reaching out for a helping hand when your business is facing a rough patch.
At Corporate Lifeline, we’re here to assist Australian companies with all of their financial issues, offering advice and guidance to achieve the best outcome possible for all stakeholders. Contact us today and find out how we can help you.