In this economy financial stress is common in all sizes and types of businesses.
A business that has done well in the past suddenly is not doing so well, and businesses that could still do well get bogged down in financial stress.
When your business has an income slump or is hit by unplanned for taxes, refunds and various threats of insolvency then entity staff can become upset. Vendors or debt collectors call regularly demanding payment immediately, etc. The staff dealing with these things (probably the most critical person being the owner of the business) get so upset they do not produce what they normally would, but unless they produce they will not make any more money and if they do not make more money they'll never get out of the financial stress. It's a pretty viscous circle.
What makes this even worse for the small business owner is that it not only affects his or her business, it also starts affecting home life too. The owner becomes so stressed he has trouble sleeping, works longer hours, spends less time with family, snaps at the minority or the kids for "no reason". All of these things seem to be part of the territory when you own a small business that's under financial stress.
How do you break the cycle and dig your way out?
There are essentially two steps involved. Both are equally important and it the case could have made that either will work without the other step being done as well.
- Compartment the finance stress. Assign someone who is not critical to your business production as the person responsible for handling all claims for payment, refund requests, etc. This could be the book keeper or someone like that. You could also outsource this function as part of a business debt settlement program, depending on whether or not the particular debt settlement company you work with offers the service. Once you have someone assigned to this job, the drill is very simple. Set up a special phone number or extension for collectors to call. Make it known that this is the only number they should call and no one else in the company will be able to handle their requests. If you're using a business debt settlement company this number would be one that the debt settlement company provides. This way there is a single person handling the calls who can keep the demands at bay and the stress off the production lines of the business. What he / she tells the callers depends in large part on the particulars of the business situation so I really can not spell it out exactly. The gist of it would be "We're going to get you paid, sit tight and let us get the show on the road and you'll get your money."
- The rest of the team gets into production. If production does not increase across the board then the person dealing with the financial demands is going to have a very hard time of it because there's no money to work with. The business owner / manager should know what needs to be done to get production increased and the business' goods or services into the hands of his customers and money being made. Even if past successful actions stopped working for some unknown reason at first, the manager's first job is to find out why that is and come up with a bright idea to get things rolling again. You make money to the degree that all of your staff are productive and getting the work done that they're supposed to do. NOTE: They key word here is productive not busy.
A business debt settlement program can help in another way. By negotiating settlements with the business' creditors, the debt settlement company reduces the amount of money needed for the business to dig out of financial stress. This is very important when the cause of the financial stress is due to larger and more difficult to control factors such as brakeer economic conditions or one's products becoming obsolete due to changes in technology. These things happen. But a business can survive them if both of the above steps are done.
Technological obsolescence requires a great degree of creativity to resolve. This would be part of step 2 above. Creativity is likely to be seriously stifled by the finance stress so step 1 is vital to freeing management up to tackle the problem.
In cases of financial stress on any kind of business, debt settlement is always and option and may just make the difference between surviving the slump or failing miserably.
AD2
(adsbygoogle = window.adsbygoogle || []).push({});
Source by Christopher Scully