The prosperity and adversity of any business is dependent on how it deals with the issue of ‘financing’. This primarily involves coherent financial planning: The selection of the right types of financing to secure liquidity and for investments, and the right strategic approach to dealings with banks.
The financial planning puts a company on a firm footing.
- to plan and finance investments;
- to safeguard the liquidity of the company;
- to reach the profitability of the company.
Safeguarding solvency is the be-all and end-all of crisis-proof company management and financial planning. In spite of this, some companies experience liquidity problems because:
- customers do not pay their bills;
- unexpected expenditure has an impact;
- there is no overview of upcoming revenue and expenditure.
Entrepreneurs who have problems financing working capital or investments should:
- determine what their company’s financial situation is;
- identify the reasons for the difficulties;
- identify the options there are for addressing these difficulties.
Access to different sources of finance can help overcome financial difficulties.
When filing for bankruptcy is the only option left for a business owner, it pays to cut your losses, initiate proceedings sooner rather than later, and move on to a new project.