Stressed businesses in survival mode often struggle with cash flow, making it difficult to continue trading. The priority is financial stability.
Improve liquidity and forecast cash flow
Free up cash by managing inventory efficiently, as holding too much increases costs. Sell unused assets, lease equipment instead of buying, and negotiate longer supplier payment terms. Selling excess inventory at a discount is better than letting it sit idle.
Tighten payment terms and conduct credit checks
Encourage immediate payments by accepting credit cards, setting up automatic debits, and requiring upfront deposits for large jobs. Switching from credit sales to cash sales stabilizes cash flow. Online banking and integrated payment requests speed up transactions and reduce delays.
Set credit limits and require applications
Credit limits prevent overdue balances from growing. Set automatic stop-credit on overdue accounts and train staff to handle credit-limit discussions professionally. Automated reminders can notify customers as they approach their limits.
Actively collect outstanding payments
Follow up on overdue payments promptly, starting with polite reminders. If needed, escalate with calls, emails, or in-person visits to negotiate solutions, such as credit card payments or installment plans.
Strengthen relationships with existing customers
Increasing revenue starts with your best customers, those who buy often, pay on time, and refer others. Since 20% of customers usually generate 80% of revenue, focus on cross-selling and upselling through direct outreach, special offers, and loyalty perks. Being transparent about business challenges may also encourage their support.
Form strategic partnerships and collaborations
Strategic partnerships include finding a complementary business with similar customers, that will on-sell your product or service.
Gather and act on customer feedback
Your current customers are great source of information about successful marketing tactics. After all, they’ve come to your business. Reach out to happy customers, such as after a sale is completed or a project is finished and ask them how they first heard about you.
Monitor industry trends and shifts
Start by understanding your current business model, key value proposition, customer segments, revenue streams, core competencies and cost structures. Dedicate time each month to researching market shifts by attending industry events, networking with peers, and exploring new technologies.
Adapt business strategies based on market needs
Advances in technology and lower operational costs have enabled innovative business models that increase productivity and profitability. For instance, drop shipping allows businesses to sell products without holding inventory, while on-demand models like Uber provide services only when needed, reducing overhead costs.
Secure funding for necessary changes
Explore government grants, low-interest loans, or emergency funding to support restructuring efforts. These resources can help stabilize operations while you pivot, invest in growth opportunities, or navigate financial challenges.
Eliminate unprofitable products or services
Focus resources on profitable areas by analyzing sales and profitability data. Avoid emotional decision-making. Legacy locations or long-standing products may no longer serve your business. If necessary, close or sell underperforming divisions while preserving stronger ones.
Adjust staff mix
A restructure most likely means letting some staff go. If they form a large part of your overhead, releasing non-productive staff or deleting parts of your business will allow you to pare down staff costs.
Consider mergers, acquisitions, or strategic pivots
If internal restructuring isn’t enough, consider merging with a complementary business or acquiring one to gain financial stability, expand your market, or access better technology. Mergers can create cost efficiencies, provide new growth opportunities, and strengthen competitive positioning.
