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How to Rescue Your Business in A Financial Crisis

How to Rescue Your Business in A Financial Crisis

No one goes into business with the goal of failure. Yet, it happens to an unfortunately large amount of businesses. Sometimes you wind up having travelled too far down the wrong road. It may have been a large problem like incompetent management or a mistake in your strategy. Too many unnoticed small errors can also land the business in trouble. Regardless, the only choice at the end is to sink or swim.

If you are not quite ready for bankruptcy, you still have a few options.

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Be Honest with Yourself

Money is one of the most difficult areas to be honest with yourself about. It is easy to make up excuses. Sure, your liquidity might be poor, but look at all your assets! Leave these thoughts behind. A financial crisis is not the time to make excuses about your situation. It is not time to blame the economy or how competitors are driving down prices. Your business may be a reflection of the economy. But, your financial success also depends on your leadership and your ability to be honest about your finances.

The more honest you are about your financial health; the more options you will have when you try to remedy it.

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Act Now, But Act Smart

Identify the source of the most pressing issue sending your company into financial disarray. Then, tackle it. Do not dance around it. Treat it like you would a sliver in your foot, and remove it before it does any more damage. This step is hard for many business owners because it may mean making difficult decisions. Yet, in many cases, these are decisions that should have been made long ago. Now that your business is in a financial crisis, there is no space for sentiment, unless sentiment happens to pay the bills.

Be certain that the decision you are making is smart. Do not cut off an essential vendor or skimp on the quality of your product. Look for those decisions that are a boon to your company, but will not directly impact the way you serve your customers.

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Try Renegotiation Before the Axe

Once you have identified your critical areas of need, and you made those difficult decisions, look towards other problem areas.

Instead of axing anything costing you too much money, try renegotiating your contracts or plans instead. This is a process that normally occurs during a Chapter 7 filing for bankruptcy, but you need to preempt this situation. Saving money on essential functions now can help you climb out of your financial pit. It will also put you in a better position if treading water results in the opportunity to move forward with your business.

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Change Your Business Model

Changing your business model is not the first last ditch attempt to use; however, it is a useful plan. Take a hard look at your current business model. Look for potential updates and improvements to help you get back on your feet, and prevent financial disasters in the future.

Look at your target market, and understand how they are changing and evolving. How can you better reach your customers now, and in the near future? Are you reaching the right customers? Can you adapt your product to better suit your customers’ needs, and solve their problems? All these are questions that could help you restructure your business model to function better now and in the future.

Financial distress does not need to be the end of the road, and bankruptcy should be considered only in the event that there is nothing else to be done. Remember to be honest with yourself about your finances and what got you there. Even if you go under, you will have learned valuable lessons for next time.

Featured photo credit: Vicktor Hanacek via picjumbo.com

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Last Updated on March 29, 2021

5 Types of Horrible Bosses and How to Beat Them All

5 Types of Horrible Bosses and How to Beat Them All

When I left university I took a job immediately, I had been lucky as I had spent a year earning almost nothing as an intern so I was offered a role. On my first day I found that I had not been allocated a desk, there was no one to greet me so I was left for some hours ignored. I happened to snipe about this to another employee at the coffee machine two things happened. The first was that the person I had complained to was my new manager’s wife, and the second was, in his own words, ‘that he would come down on me like a ton of bricks if I crossed him…’

What a great start to a job! I had moved to a new city, and had been at work for less than a morning when I had my first run in with the first style of bad manager. I didn’t stay long enough to find out what Mr Agressive would do next. Bad managers are a major issue. Research from Approved Index shows that more than four in ten employees (42%) state that they have previously quit a job because of a bad manager.

The Dream Type Of Manager

My best manager was a total opposite. A man who had been the head of the UK tax system and was working his retirement running a company I was a very junior and green employee for. I made a stupid mistake, one which cost a lot of time and money and I felt I was going to be sacked without doubt.

I was nervous, beating myself up about what I had done, what would happen. At the end of the day I was called to his office, he had made me wait and I had spent that day talking to other employees, trying to understand where I had gone wrong. It had been a simple mistyped line of code which sent a massive print job out totally wrong. I learn how I should have done it and I fretted.

My boss asked me to step into his office, he asked me to sit down. “Do you know what you did?” I babbled, yes, I had been stupid, I had not double-checked or asked for advice when I was doing something I had not really understood. It was totally my fault. He paused. “Will you do that again?” Of course I told him I would not, I would always double check, ask for help and not try to be so clever when I was not!

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“Okay…”

That was it. I paused and asked, should I clear my desk. He smiled. “You have learnt a valuable lesson, I can be sure that you will never make a mistake like that again. Why would I want to get rid of an employee who knows that?”

I stayed with that company for many years, the way I was treated was a real object lesson in good management. Sadly, far too many poor managers exist out there.

The Complete Catalogue of Bad Managers

The Bully

My first boss fitted into the classic bully class. This is so often the ‘old school’ management by power style. I encountered this style again in the retail sector where one manager felt the only way to get the best from staff was to bawl and yell.

However, like so many bullies you will often find that this can be someone who either knows no better or is under stress and they are themselves running scared of the situation they have found themselves in.

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The Invisible Boss

This can either present itself as management from afar (usually the golf course or ‘important meetings) or just a boss who is too busy being important to deal with their staff.

It can feel refreshing as you will often have almost total freedom with your manager taking little or no interest in your activities, however you will soon find that you also lack the support that a good manager will provide. Without direction you may feel you are doing well just to find that you are not delivering against expectations you were not told about and suddenly it is all your fault.

The Micro Manager

The frustration of having a manager who feels the need to be involved in everything you do. The polar opposite to the Invisible Boss you will feel that there is no trust in your work as they will want to meddle in everything you do.

Dealing with the micro-manager can be difficult. Often their management style comes from their own insecurity. You can try confronting them, tell them that you can do your job however in many cases this will not succeed and can in fact make things worse.

The Over Promoted Boss

The Over promoted boss categorises someone who has no idea. They have found themselves in a management position through service, family or some corporate mystery. They are people who are not only highly unqualified to be managers they will generally be unable to do even your job.

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You can find yourself persistently frustrated by the situation you are in, however it can seem impossible to get out without handing over your resignation.

The Credit Stealer

The credit stealer is the boss who will never publically acknowledge the work you do. You will put in the extra hours working on a project and you know that, in the ‘big meeting’ it will be your credit stealing boss who will take all of the credit!

Again it is demoralising, you see all of the credit for your labour being stolen and this can often lead to good employees looking for new careers.

3 Essential Ways to Work (Cope) with Bad Managers

Whatever type of bad boss you have there are certain things that you can do to ensure that you get the recognition and protection you require to not only remain sane but to also build your career.

1. Keep evidence

Whether it is incidents with the bully or examples of projects you have completed with the credit stealer you will always be well served to keep notes and supporting evidence for projects you are working on.

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Buy your own notebook and ensure that you are always making notes, it becomes a habit and a very useful one as you have a constant reminder as well as somewhere to explore ideas.

Importantly, if you do have to go to HR or stand-up for yourself you will have clear records! Also, don’t always trust that corporate servers or emails will always be available or not tampered with. Keep your own content.

2. Hold regular meetings

Ensure that you make time for regular meetings with your boss. This is especially useful for the over-promoted or the invisible boss to allow you to ‘manage upwards’. Take charge where you can to set your objectives and use these meetings to set clear objectives and document the status of your work.

3. Stand your ground, but be ready to jump…

Remember that you don’t have to put up with poor management. If you have issues you should face them with your boss, maybe they do not know that they are coming across in a bad way.

However, be ready to recognise if the situation is not going to change. If that is the case, keep your head down and get working on polishing your CV! If it isn’t working, there will be something better out there for you!

Good luck!

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