Four Pieces of Advice to Struggling Startups from Business Rescue Experts [180 Advisory Solutions]
Running a startup to the ground is remarkably easy.
We’re here to give you some advice on how to build a resilient business.
While some issues are very unique to the business in play, some of the problems businesses struggles with are frightfully common and often simple to fix.
Having been in the business rescue industry for many years, we’ve seen a bit of everything. We’ve sat down to pin some of the most common things that SMEs and startups struggle with.
Here’s our top four of SME struggles, and how to prepare for them:
Set realistic forecasts
Albeit a bit of a nerdy topic, let’s talk about forecasts!
Forecasts should never be underrated. Unfortunately, we see one business after the other do exactly that, and present poorly designed forecasts. This is a problem.
If you have a realistic forecast based on facts and figures, you’ll have a somewhat clear idea of where you’ll be in the future. This is good. When you can predict, you can prepare!
Forecasting can also be used in hind sight for benchmarking forecasted sales vs. real sales. Did you sell all the outputs you had accounted for, have your forecasts improved from previous month/ quarter/ year?
Prepare for the unexpected
Things rarely go to plan. Free rides when you’ve already bought a ticket, rain on the day you left your umbrella at home, 50% off all electronics right after you’ve bought your new computer. Such is life, and such is business too.
Even the most settled industries can crash overnight, and without a warning.
A lot of new business owners are led to believe that things will run smoothly. But think about it, if it was easy to succeed and make the big bucks – wouldn’t we all be millionaires?
When you’re writing strategies, plans and forecasts make sure to leave some wiggle room. That way, when disaster strikes, you’ll hopefully have a bit of legroom and enough resources to bounce back onto the right track.
Don’t ignore credit control
It’s our experience that SMEs and startups are often reluctant when it comes to asking clients and customers for payment.
In a smaller organisation it’s often very normal that one person takes on a range of roles. Whilst only natural, especially when resources are stretched, this can be poisonous to a cash flow.
It can be awkward to be the person dealing with customers, as well as the one responsible for following up on payments. However, both needs done! Regardless of how good a relationship you might have, you should still expect your customers to pay their debts on time.
The easy solution is often to separate the roles completely. Have one person do sales and another pursuing debt.
That said, not all SMEs can afford to have separate roles.
When agreeing on terms and conditions, make sure that credit terms are crystal clear.
If a payment is overdue, pick up the phone rather than send an email or a letter. A phone call is much more personal, and demands an immediate reaction. There’s less time to come up with an excuse on the spot.
Ask for help
Last but not least, let’s get one thing straight. Asking for help is by no means a weakness. Asking for help is accepting that you can’t be an expert in everything, and then utilizing the network around you.
If your business is starting to struggle, it’s time to park your ego and ask for professional help.
The quicker you involve a business rescue specialist, the better your chances are of a successful rescue.
About the author
180 Advisory Solutions is a Glasgow based corporate recovery, restructuring and rescue specialist. With many years of experience in personal as well as corporate insolvency, 180 Advisory Solutions is ready to help you navigate financial turmoil and bounce back.