During a crisis, you do everything possible to keep your company afloat. You cannot influence all factors, but there are ways to minimize the risk of bankruptcy.
Whether you are dealing with a short recession or a serious crisis, as an entrepreneur you are often at the mercy of the whims of the market. You cannot change that, but you can change how you deal with these whims. To help you in the fight against bankruptcy, here are seven tips to keep your company financially healthy in tough economic times:
- Have a good liquidity budget
A good liquidity budget helps you gain insight into future income and expenditure. You make an overview of all bills you have to pay, how much VAT you have to pay and which payments are still expected. Do you already have a liquidity budget? Then now is the time to adjust it to the current situation.
- Good debtor management
Badly paying debtors cost entrepreneurs a lot of time and money. Certainly in difficult economic times, defaulters pose a serious threat to the cash flow within your company. Therefore, make sure you have well-organized credit management so that you can do everything you can to get invoices paid on time. It is important to be able to see at a glance who to send a payment reminder and who to call.
Do realize that your customers are probably also in dire straits. Do not be surprised if one of your debtors sends a letter asking for a postponement of payment. You can choose to discuss a possible payment arrangement with these parties. After all, you cannot pick from a bare chicken.
- Provide a financial safety net
To avoid running out of capital in the event of the slightest setback, it is important to create buffers. It may be a clincher, but don’t underestimate the importance of savings. You can also opt for a revolving credit with the bank or another lender
- Improve your cash flow
Is there really not enough money coming in? If the costs exceed your turnover, your reserves will disappear like snow in the sun. It is then advisable to take a look at any government schemes and loans. In times of crisis, the government sometimes comes to the rescue.
A large emergency package has been developed for the corona crisis with various measures to keep SMEs afloat. Read all about the emergency kit here.
- Investigate financing options
Are you thinking about borrowing money for your business? Then immerse yourself in the various financing options. Besides borrowing money from the bank, there are more ways for entrepreneurs to find additional financing, for example through the guarantee scheme for small and medium-sized enterprises (BMKB), the Growth Facility scheme, one of more than 300 types of subsidies .
Also take a look at the possibilities for crowdfunding. You do not turn to traditional investors, but to other citizens: the crowd. At the Business Credit Desk you will find a lot of information for support when applying for credit.
- Invest in relationship with the bank
It pays to invest in a good relationship with your bank. Always be honest and transparent about the financial position of your company. Do you need additional financing? Please indicate this on time, a proactive attitude helps.
So show what you can offer the bank in terms of collateral as an entrepreneur. Banks are not very eager to assess your credit application if it turns out that you are already on your lips.
- Explore your opportunities abroad.
Abroad offers plenty of opportunities with a well-founded plan. Of course you cannot start a business across the border if the borders are closed, but you can make plans for the future. Every crisis comes to an end, so make sure you are one step ahead of the competition by already looking at growth opportunities after the recession.