Facing overwhelming odds and prevailing

There comes a time in every entrepreneur’s career when one faces a standstill. Business begins to take an undesirable route, leading a company’s financial status to unravel due to a hoard of serious debt. 

However, that may not be a privilege to most modest businesses or even start-ups for that matter. And it doesn’t get any better when you have creditors knocking on your office door. Typically, when one finds himself or herself in this locus, there are only two simple means of handling the debt at hand: resort to closing or selling the business with a pre-planned means of detaching it from the market and try to reduce further monetary consequences or making as many attempts as possible to salvage the business and to sort out whatever unpaid arrears remain, regardless of the hefty amount. In my opinion, or rather experience, debt can also be seen as a form of opening for SMEs to achieve and discover various alternatives on how to rise above controllable and uncontrollable conundrums. 

Here are three steps that you can follow to help sustain and groom your business to achieve a healthy growth in the long run:

Manage finances prudently 

It is most crucial to start by controlling and calculating your debt carefully. In order to avoid incurring new debt, one should always come up with a scheme on various means of reducing these burdens. One of the aspects that one should focus on is prioritizing payments. The best thing to do in this case would be to overcome the company’s highest-interest rate debt or any cumbersome loans first. This would most probably include paying off credit cards, bank debts, government loans, and so forth. By doing so, you may prevent yourself and the company from getting into a sticky lawsuit. 

Another way of managing the company’s budget is to cut costs. Using the financial scheme mentioned above, you will be able to see where it would be needed to make the appropriate budget cuts and also create diverse cost-trimming alternatives. 

A good way to start cutting costs is to negotiate reasonable payment terms with your creditors. It is completely fine if you can’t pay a whole lump sum. Connect with your creditors and explain how both parties can go about finding a solution. If your long-term objective is to secure a continuous cash flow, then your payment should be bargained to the minimum or as low as they would allow. This is to ensure a stable circulation of cash flow as well as to enable a more flexible means of dealing with the bills without disrupting the business entirely. In my case, I had to approach agencies such as EPF and SOCSO to bargain a deal – such that I got to keep my business so long as they did not shut down my company. However, it is vital to always take prompt actions in settling any predicaments instead of disregarding or procrastinating, which would only make matters much worse and complicated for all parties.

Outsourcing different resources 

Although this may sound like you have to fork out more money, it is actually rather cost-efficient. The most common and prevalent factor is that employers these days prefer to juggle every department on their own such as having a Human Resource unit, Marketing, Finance or Public Relations and so forth. 

No doubt these are essential to warrant smooth business operations flow but in times of financial constraints, it could in fact encumber the company’s cash flow. A tactical approach to this is to outsource all non-core units in the company. Depending on the industry that you are in, these non-core units may vary and some may even need a minimum of three units based on the scale of the company as well.

Back when my company was facing losses, we had to resort to subcontracting the finance and operations units and decided on retaining only three main departments which comprised training, technology and sales. This was because we needed to be able to administer and focus on our company’s niche and what we knew best at that given time. As technology is our area of expertise, we paid more attention towards securing robust partners such as SAP and Microsoft. To our advantage, this helped in building good credentials in the hopes of convincing our stakeholders and banks as well as to boost our company’s market value. 

A different approach would be to hire freelancers or interns for short-term projects. The positive facet to hiring a temporary worker is that you are not obligated whatsoever to pay them at the price of a full-time employee; whereas for interns, it is indeed a good learning curve for them and an ease for the employer with regards to their allowance. And if they happen to do an outstanding performance, you may even hire them full-time – saving your company recruiting and training costs.

Sales to increase revenue

The basic skill that should be cultivated in every entrepreneur is sales skills. Most would assume that to be good at sales, one is naturally born with it or probably has a knack for it – that is not true. No matter what your background may be, sales skills are the driving force to improve and nurture a profitable business.

Yes, you may need to take up and learn certain skills that you are uncomfortable with or perhaps, loathe in some cases, but those could be the skills you need to run a smooth-sailing business. Say for instance, a chef wants to open his own restaurant – since he is most passionate about food. In order for him to kick-start his business, he should already know how to connect with the right people and market his brand himself to garner awareness and publicity.

Coming from an engineering background, I had to pick up many abilities that I was not passionate about but in return, they helped in reviving my business to even greater heights. On the other hand, since the digital era has introduced and closed the gaps between borders, digital platforms are convenient and economical modes to market your company or brand. Unlike the conventional way of cold calls, entrepreneurs are presented with an array of strategies in terms of grooming start-ups and more significantly, to build company revenue in an efficient manner. Now, we should not neglect the traditional way of sales but rather adapt to the changes that are implemented as more of an added bonus to our business. A smart way to generate new leads would be through platforms such as LinkedIn, sponsored posts on various social media, leveraging on-site SEO and utilizing keyword tools, tracking cookies and so on. 

In conclusion to the points discussed, I must include that it is a vital key of sustainability in terms of prioritizing funds, that every SME or an entrepreneur for that being, should identify the main cores of its business and to provide a systematically prudent funding scheme to further grow the business at an initial stage. As for sales, preparation is essential. A good amount of study and research has to be conducted on emerging markets to further discover and experiment new platforms to market an organizations core products or services, thus giving an advantage of adaptability with the ever changing variables in the business climate and of course, to adapt and brave some of the toughest times - financially.

And of course hope, there is always a glimmer of light in any darkness, find it and make it bright as ever and BEAT THE ODDS.

S.T. Rubaneswaran is an accidental entrepreneur. An engineer by qualification, he chose to begin his career as a door-to-door salesman. He and his team successfully turned around the formerly loss-making Knowledgecom Corporation Sdn Bhd (www.eknowledge.com.my) to become the most-sought after training company today.

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