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What to do if a Financial Crisis Hits

Crisis strikes every business at some time, and many times, it’s completely unexpected. However, those companies that react the best to a crisis often become tomorrow’s leaders.
However, if you find your company in a financial crisis, what do you do?

Here are some tips:

  • Relax and think. We live in a reactionary society. For whatever reason, most people wait for something bad to happen, get wound up emotionally, and then make a rash decision they end up regretting. Rather than following that path, let your emotions pass, calmly analyze the situation, and then start making decisions based on the reality you face, not on what you feel.
  • Proactively plan. You can’t plan for every possible scenario, especially if you’re getting to know a new business. But, if you are the type who is able to think ahead, do it and prepare for disaster. If you’re not, begin to develop this habit and consider what scenarios could happen in the near future for your business based on what’s happening right now and your experience in the past. If you are already prepared to handle a crisis, you may be able to quickly snatch up market share while your competitors figure out what hit them.
  • Don’t blame yourself or anyone else. Blame literally never helps. Try as you might, and as smart as you and your top employees are, every business goes through near catastrophe at some point. Blaming might make you feel better, but it does nothing to help your business move forward. The first of the order of the day is to get your business back on the right track, and the second is to figure out what went wrong and how to avoid it in the future.
  • Make sure your credit is good and you have available capital. Just in case you need to borrow, make sure you have a good credit score and capital available to you. This could be a 504 loan that we offer, reserve cash from recent profits you generated, your personal cash, or money you borrow from friends or family (although you should avoid this if at all possible). Just in case the worst happens, you want to be ready so you can get access to money and keep your business operations flowing as smoothly as possible.
  • Learn from what happened and avoid thinking of it as a “failure.” Once you get past the storm, analyze what went wrong and why you think it happened. Viewing the situation as a personal failure or a failure of someone else’s causes only judgmental feelings and negative thinking. Looking at the situation as an opportunity to learn, however, helps you prepare and makes your business stronger moving forward.

Enjoy Your Position Ahead of the Pack

Follow these tips during a time of crisis, and you might find yourself ahead of other businesses that react rashly. Few companies choose to think ahead – most react quickly to what just happened.

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