5 Things to do During the Financial Crisis

The financial crises are pretty much part and parcel of every business. Even the leading companies of the world have had a fair share of going through tough financial conditions at one point or the other. By their very nature, the majority of the businesses could be unpredictable. You may have the best technology operated by the best workers. Still, there is no way you can be sure of being immune to a financial emergency. 

As an entrepreneur, you have to master the art of dealing with such problems. Otherwise, your business will close down eventually. No matter how stable your brand may look, as soon as it becomes financially-oppressed and no longer stands up to people’s expectations, the customers will switch to other companies.    

So here are a few ways that can serve as a glimmer of hope when your business is financially hitting the lower layer:  

1. Consider taking a loan

The majority of the financial advisors would recommend opting for a loan when your business is undergoing a financially weak phase. Regardless of the size and niche of your business, there are a variety of financing options available. All you have to do is determine the right reason for taking a loan. For example, in case of immediate access to funding, you can apply for fast loans. This speaks volumes about the diversity of the lending industry. 

To be on the safe side, you should stick to the following guidelines while applying for a loan:

• Since there are so many loan options at your disposal, you should not be tempted to borrow more than what you precisely need. It could further drown you in debt. 
• Shop around to get the best rates. An authentic study unfolds that an average borrower can save as much as 3000 dollars by getting five or more quotes from the lenders. As a businessman, you might be running short on time. However, you can easily assign this task to someone else.
• Go through the fine print. Before putting your signature on the dotted line, make sure you have a complete understanding of all the terms and conditions.  

2. Boost sales

Well, this is an obvious one. All the businesses always try their tooth and nail to increase the bottom line. However, when you are not in a financially sound position, it takes an entirely different approach to increase your sales. Reducing the profit margin is one such option. That way, you will surely compromise on the profit, but at least the business will keep on rolling. Sometimes the inventory gets outdated in warehouses if you fail to sell it on time. 

When you are offering products cheaper than standard market prices, make it a point to spread the word. Since social media does not require a huge influx of investment, you can easily market your products on platforms like Facebook, Twitter, Instagram, etc. For B2B businesses, LinkedIn would be an ideal medium to go viral. 

3. Try your hand on crowdfunding

Of late, crowdfunding has emerged as one of the go-to sources to seek funds. Whether you need money to tackle cash flow issues or complete a rewarding project, crowdfunding can rescue you from all such problems. There are many websites where you can post details about why you need the money and, if convinced, the interested parties will invest in your venture. 

Here are some key steps to make your crowdfunding campaign more effective: 

• As mentioned earlier, there are various crowdfunding platforms. You have to research which one fits best in your scheme of things. Simply put, choosing the right platform is the first pre-requisite. 
• Preplan the incentives. No one would like to invest in your project unless you offer worthwhile rewards.
• Ensure proper communication. Sometimes investors are reluctant to invest their money because of the communications lapses after the funding is done. Come up with a proper method regarding how you will keep the backers informed and updated throughout the project.  
• Prepare a video. Videos are a good way to personalize with strangers out there on the crowdfunding websites. It helps a great deal to infuse trust among the donors.

4.   Reduce and rearrange your expenses 

When you are standing in the middle of a financial crisis, you might think reducing expenses will not save as much money. But that’s simply not true. The fact is when you are running a company with dozens of employees, you can easily overlook the unnecessary expenses. Try giving your staff a tight monthly budget, and you will begin to see the difference in no time.

Sometimes you end up saving more by rearranging the expenses. For example, if a fair proportion of your profits is going in debt, you should call your lender to renegotiate the loan terms. More often than not, lenders would be willing to do so. 

If you are paying the borrowed amount in fortnight installments, you might be able to convert them into monthly payments for your convenience. These small measures will help trim the financial fat in the long run.  

5. Look for business grants

What is better than getting money and never have to struggle with ways to return it? That is what the grants are all about. There are grounds like export, expansion, and research where your business could be eligible for a business grant. There are more than 32 types of business grants, an ample quantity to choose from. 

Needless to say, the competition is furious when it comes to qualifying for a grant. Although, you have a good chance of winning if your business is associated with a social cause. Minority business communities also have a higher probability of breaking through narrow requirements.

The final verdict 

If your business has been struggling lately, you should not take the risk of persisting too long with a financial crisis. It can be very damaging to your business. Take the example of companies that were once hitting rock bottom. After adopting the alternatives mentioned above, they have managed to bounce back. With so many successful cases, there is no other option but to take advantage of these approaches for your business.