How to Financially Protect Your Business During a Downturn

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How to Financially Protect Your Business During a Downturn, any business that has made it through the economic crisis caused by the coronavirus pandemic to this point should be congratulated. Many fared far worse. Of course, making it through one downturn doesn’t guarantee you’ll make it through another. If you’re just starting your business, you have no guarantees either. You’ll still need to take a proactive approach to protect your business.

Talk to Your Lender

With the average small business loan coming in at $633,000, there’s a decent chance that your business carries some amount of debt. While the funds that debt allows you to access can be incredibly useful, it can become a serious liability during a financial downturn. It’s important to reach out and talk to your lender if you think you’re going to start having trouble paying your debt back because of economic difficulties. Lenders make the most money off of you when you’re able to pay them back with the interest you owe. It’s in their best interests to work with you on figuring out a way for you to be able to continue making payments.

Source: https://dgstudentfinance.com/

Opt for Cost-Effective Marketing

For many businesses, one of the first big things to go when times get tough is marketing. That may seem like a reasonable cost to start cutting, but it’s important to remember that your marketing is one of your best tools for attracting and retaining customers. Those customers are going to be the ones who keep you in business. Instead of cutting back on your marketing efforts, instead, opt for focusing your energy and funds on more cost-effective strategies. Digital marketing techniques tend to be more budget-friendly than traditional methods.

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Get Help from Professionals

Unless you’re already a financial guru, you’ll probably benefit from getting professional help to manage your finances. An accountant can help you balance your income and expenses, and give you an idea of who much you need to trim down in order to continue to make ends meet. If things just aren’t working out for you financially, they can also help you navigate filing for bankruptcy. Filing for bankruptcy is complicated, so if you end up going this route, you need someone who can help you figure out how to file appropriately.

Source: https://www.cainattorneys.com/

Protect Your Cash Flow

Of course, filing for bankruptcy is something that is often best avoided when possible, so before you get to that point, make sure you’ve taken steps to protect your cash flow. Finding ways to reducing costs will be essential, especially since there’s a good chance you won’t be bringing in as much. You may find you need to navigate laying off or furloughing employees in order to keep your doors open. Strategic scheduling can also help reduce labor costs. Taking steps to reduce your power bill, encouraging timely payment of invoices, and prioritizing the expenses you have are other ways to help.

Source: https://hiring.monster.com

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