Running a business isn’t easy. In fact, it is estimated that approximately half of all new businesses fail within their first five years. But, the success rate is better for those entrepreneurs who are able and equipped to weather the inevitable storms of running a small business. If your business is having a tough year, there are some things that you can do to get through the hard times.
One of the first and easiest steps you can take when things get difficult for your small business is cutting costs. As a business owner, a lot of your costs — such as rent and insurance — may be fixed. But there are other costs, like labor, which may have some more wiggle room. If you have employees, consider utilizing them less, cutting back on labor hours, and doing more of the work yourself. You may also be able to reduce utility bills or office supply costs by taking some simple conservation measures.
Negotiate Credit Terms
Unfortunately, creditors don’t stop trying to collect their payment when your business is having financial difficulties. But, it is possible to negotiate with your creditors to get more affordable payment terms. Instead of avoiding collectors when you are unable to make payments, speak to them and ask for penalties and interest to be waived for a period of time, or ask for your payment to be lowered to a more manageable level. Don’t forget that it is their job to collect the debt that you owe, but it is your job to advocate for yourself and your interests.
Stop Bank Levies
One of the major problems that businesses face during tough years is paying taxes. Unfortunately, when taxes go unpaid, the IRS has the option to levy your bank account. Potentially, they can seize the funds in your account or garnish wages. However, it is possible to stop a bank levy, and the IRS offers many options to do so, including installment accounts and flexible repayment terms. If you get a notice from the IRS notifying you of its intent to levy, you should speak to a tax professional or tax advocate right away and determine your options. For those struggling with tax issues, enlisting professional help may get you a better outcome.
Invest in the Business
It may seem counterintuitive, but when your business is struggling, this is the best time to invest in its growth. By finding small ways to make your business look and run better, you can increase your customer base and, hopefully, pull your company out of its rough patch. You’ve probably heard the saying, “You have to spend money to make money,” and this is never truer than when your small business is trying to survive a particularly challenging year.
The most important thing to remember when your business hits a rough patch is that you must do something proactive. Problems won’t just go away on their own, so you have to take action. Work hard to keep your business afloat, even when things get difficult, and you can avoid becoming a small business statistic.