Business Low on Funds? 6 Things To Do
One of the most worrying things that can happen to you as a business owner is looking at the books and noticing that you do not have as much money and you thought or expected that you would. A company that is low on funds has fewer options and less leeway when things go wrong, or business isn’t as good as it usually is, so it can be pretty scary at times, but instead of panicking, you should do these six things to boost your bottom line, instead.
1. Review your cash flow in detail
The first step is understanding exactly where your money is coming from and where it’s going. Look at your cash flow forecast, outstanding invoices, fixed costs, and variable expenses. This clarity allows you to identify immediate pressure points and make informed decisions rather than reactive ones.
2. Chase outstanding invoices promptly
Late payments are one of the most common causes of cash flow problems. Review your accounts receivable and follow up on overdue invoices with polite but firm reminders. If necessary, consider introducing clearer payment terms, early payment incentives, or deposits for future work to reduce risk.
3. Reduce or pause non-essential spending
When money is tight, it is sensible to scrutinise every single outgoing your business has to see if any fat can be trimmed there. Review subscriptions, software licences, marketing spend, and discretionary expenses, and cut or pause any that are not vital to the running of your business. Doing so can quickly ease pressure while you focus on stabilising income.
4. Explore possible sources of money owed to your business
Many businesses overlook money they may already be entitled to. This could include tax rebates, supplier refunds, overpaid utilities, or insurance adjustments. Another often-missed area is vehicle finance. If your business has used car finance or PCP agreements, you may be eligible for a car finance claim due to mis-selling or undisclosed commissions. Recovering money that’s already owed can provide a valuable cash injection without taking on new debt.
5. Speak to creditors early
If you’re struggling to meet payments, don’t ignore the problem. You need to be proactive and contact landlords, lenders, suppliers and other creditors as soon as you possibly can. Talk to them about revised payment terms or temporary arrangements, and you will probably find that creditors are more willing to negotiate than business owners expect, especially if you’re proactive and transparent, than you might have expected.
6. Focus on short-term revenue opportunities
While long-term strategy is important, cash flow issues require immediate solutions. Consider offering limited-time promotions, upselling to existing clients, or launching a quick-win service or product. Existing customers are often easier and cheaper to convert than finding new ones, making them a valuable resource during lean periods.
Being low on funds is something that can happen to any business at any time, and often it happens when you really don’t expect it, so being prepared and knowing what to do is sensible. It will help to keep you from panicking and ensure that you know exactly how to proceed if and when it happens to you.
