Saving your most valuable asset - your business. By Steve Marsten

Last week we covered the first 5 points of turning a business around. Good leaders and entrepreneurs recognise when things are getting difficult early and take immediate action. The next 5 key points are:

6. Meet with your suppliers

Company suppliers get very nervous when they hear “on the street” that one of their customers is in trouble. Sometimes word travels faster than your ability to thoughtfully alert the appropriate people. You need to develop a prepared statement outlining the problems and how you plan to deal with them. Respond quickly and thoughtfully to any enquiries.

7. Talk to the ATO

If you can’t pay your taxes, notify the ATO or work with your accountant/tax agent to negotiate a payment plan with the ATO to ease your cashflow and overall financial burden.  

8. Let your bank know that you have a plan

If you have loans or a line of credit, call—don’t just email—your bank manager and tell them you need to meet in person. Update them on your situation and explain your plan of action.  Appear confident and reassuring.

9. Keep key personnel

If necessary, figure out which employees you can let go without damaging your business.

Nobody likes to let people go, but for the business to survive you need to keep only people who are bringing in, making, or servicing sales. Maybe you can hire some back later when times are better. Or maybe some you just cut their hours for now and hope to increase again later.

Make your first cut deep, especially with employees! You want to avoid having multiple rounds of cutbacks—that becomes psychological torture, as all employees will then fear they are likely going to lose their jobs sooner or later.

10. Cut unnecessary costs

Make a list of all your expenses and eliminate what you don’t need. You need to buy time in order to fix your problems, and cutting expenses is a good way to buy “financial” time.

Going broke is like a disease, the earlier it’s treated the higher the survival rate. The aim is to get help before its terminal.

At Sothertons we have assisted many businesses turn things around. Its hard work, however there is a high probability of a great outcome. Call us on 4972 1300 to find out more.