Helping Improve Your Business
Whether your business is failing financially or you are struggling to plan for future, it is important to quickly turn around your fortunes. Many businesses fail within 5 years and avoiding this can be a difficult task if you are experiencing early problems.
Roger Hatherall & Co offer support to all businesses throughout Bath and the surrounding areas. If you are struggling to manage your finances or have a poor financial performance, we can always help.
Cut Your Costs
One of the first steps that a failing business should take is to reduce your current costs. Whilst you may be paying for resources or other running costs, there are still ways to reduce your spend so you are consistently spending less money. Whether this is finding cheaper alternatives to your current costs or completely cutting the spend from certain departments and outgoings, something needs to be done.
In this situation, you should review all the current costs you have and identify which costs are not leading to a positive income. These costs should either be lowered or completely stopped to help your business make money, as well as reducing costs elsewhere when necessary and if it is possible to reduce these costs whilst still retaining your business key selling points.
Growing Too Fast
Many businesses are guilty of growing too fast, without a real understanding of how much money it will take to continue running once the business has expanded. Whilst some businesses can grow successfully, many businesses end up running out of money very quickly, with expenses of building premises and staff outweighing the income you are bringing into the company.
Whilst this may not be a reason your business is failing, it is something you must consider for the future. You should always plan your business growth in the long-term, ensuring you have enough funds available to successfully grow your business and deal with the additional expenses you will have to face. If you do feel your business has grown too quickly, downsizing is always an option to ensure the business stays afloat and you can significantly reduce your costs.
Poor Pricing Strategy
With the help of financial forecasting, you can gain a good idea of how much your business should be making and the total revenue you could make each month. If you feel you are selling enough products and services, your business failures could be down to your current pricing strategy.
By reviewing your pricing strategy, you can often raise revenue whilst not actually having to do too much more work. This could help raise your revenue and provide you with a positive cash flow, without having to lower your costs or make drastic changes to the business.