One of the first lessons anyone should learn about managing a business is how unpredictable the landscape can be, especially for smaller enterprises. At times, a shift in market trends, a bad month or two in terms of sales, or natural calamities that are out of your control can put your business in a financial lurch.

If you don’t know how to practise proper financial management during extra challenging times, temporary setbacks like these could easily cause a long-term crisis for your business and, if worse comes to worst, may even lead to a shutdown. Thus, as a small business owner, it’s important for you to thoroughly understand how financial crises can and what can be done during those testing times.
Here’s a quick guide on how you and your fellow small business entrepreneurs can deal with the financial crises that may come your way.
What Causes a Financial Crisis?
A financial crisis can occur for various reasons. It could be because of inconsistent cash flow, lack of sales, the business being heavily in debt, or the business having insufficient profits to support itself. Improper financial planning, a lack of capital to begin with, and ineffective business strategies can also blow up in an entrepreneur’s face at some point and evolve into a period of crisis. Left unchecked, a crisis can quickly deplete resources or pose significant obstacles to business operations, perhaps even forcing a business owner to close their doors for good.
If your business is going through such times, what’s important is for you to stop the bleeding and put yourself back in a winning position as soon as possible. You may want to explore business advisory services to help pinpoint what’s causing the financial crisis in the first place and what the best ways to mitigate it are. Perhaps your business needs restructuring to lessen overhead costs or guidance with regard to making more prudent investments with solid returns.
Whatever the case may be, one of the most dangerous things you can do is to do nothing different from the usual. Complacency during a financial crisis often results in inescapable damage, and too many business owners regret waiting to take action until it’s too late and they’re in the red.
Dealing With a Financial Crisis
Whether you just want to be prepared in case a financial crisis hits your business or you’re already in the middle of one, there are certain things you can do to increase your odds of overcoming it. The following pointers should help you get your business finances back on track:
1. Review Your Revenue Streams
In the face of a financial crisis you should, first and foremost, review your existing revenue streams. Have you been failing to consistently meet your sales goals? Is your business strictly seasonal, and have you found it difficult to support your operations during the off-season? Or perhaps there’s something lacking in your pricing strategy that makes your current offerings unable to secure a profit?
Regardless, asking yourself these questions and more during a review will make it easier for you to identify your business’s weak points. Knowing the problem is the first step towards solving it.

2. Look for Ways to Raise Capital
Another good strategy for bolstering your business during financial crisis mode is to raise your current capital. There are several ways that you can go about this, like applying for a business loan or other type of financing. This could help your business get back on its feet during dire times, allowing you to weather through the crisis until you’re stable again.
Business loans are especially useful for small businesses because, unlike bigger corporations, small- and medium-sized enterprises (SMEs) have fewer resources to fall back on when financial issues arise. It may also be viable to take out money from your personal savings or to ask for help from family or friends, granted that you pay any borrower back on just terms.
If you’re applying for a loan, make sure you scrutinise the loan agreement carefully to ensure that your small business will be able to meet the loan’s obligations. Look for lower interest rates and convenient repayment options, among others. You wouldn’t want to cause more cash flow problems as you’re paying back the loan.
3. Cut Down on Non-Essential Expenses
Next, check your operating expenses to see if there are non-essentials that you can cut off to save money. For instance, are there supplies you’re buying that don’t get used anyway, seeing as a certain product isn’t getting enough sales? Then perhaps it’s time to eliminate the product from your offerings and shear down its associated costs.
This may also be a good time for you to negotiate prices with your current suppliers. If their prices are already too steep for you, then consider shopping around for other suppliers whose prices are well within your budget.
Make it a point to be more efficient in your daily operations as well. Even supposedly small things, such as using LED lights or conserving water, can help you save up on utility expenses.

4. Look Over Your Current Business Strategies
Lastly, if you find that your business is constantly trying to make ends meet, then perhaps it’s time to look over your overall business strategy and make major changes. Revisit your core sales, marketing, operations, and investment strategies. Maybe your current offerings aren’t competitive anymore in the current market, and it’s high time you introduced something new to get your customers back. Or perhaps your marketing isn’t up to par with current standards, and you need more cost-effective ways to get your business’s name out there.
The way you run your business and what you invest in should also be evaluated during a time of financial crisis. It could be that your traditional practices aren't cutting it anymore and it’s time to embrace modern solutions such as purchasing better equipment or software solutions to better meet your customers’ demands. As for your investment strategies, see if you’re actually putting your money into things that can help you gain revenue in the long run; unprofitable ventures will only make the bleeding worse.

All that being said, remember that a financial crisis doesn’t have to spell the end for your small business. It will surely be a difficult time, but the situation can still be remedied with the right guidance and timely action on your part. For business advisory, accounting software solutions, HR services, and international client services that can all help you improve upon your business prospects in good times and in bad, contact the people at Target Accounting.