How to deal with a financial setback
In the business world, there are bumps on the road and financial setbacks. In this situation, it is easy to panic and look for someone to blame.
Instead, the first action should be to devote time to looking at ways to return the top line and margin to its former strength. Whilst looking to cut costs may support some short term gains, this may damage the long-term structure and ability to recover – leave cost cutting until the top line review has been concluded.
I found more interesting tips about how to overcome financial setbacks on Forbes, where three experts offered the following advice:
1 – Sometimes cuts need to be made – What to cut? What not to cut? W. Michael Hsu, Founder and CEO of DeepSky, says that you can’t cut coffee and accounting. By coffee, he means small perks around the office. Do you want to irritate your team when you most need them to help take you out of the situation? Accounting is also an essential part of overcoming financial setbacks and you need it more than ever for a clear picture of what’s going on.
2 – Step back and reconfigure – Elle Kaplan, CEO and Founding Partner of LexION Capital Management believes that step back and reconfigure plans are essential when addressing a financial setback. ‘Avoid myopia by stepping back and evaluating when you should strategically prune an idea,’ she says.
3 – Focus on the future – firstly it’s necessary to turn off emotion during setbacks, suggests Fourlane President and CEO, Marjorie Adams. ‘Anytime we have a setback in business, it is easy to look for blame, feel anger, frustration or fear.’ She advises focusing on what needs to be done and move on.
Financial setbacks happen and we learn from them but it is always better to be prepared well in advance and to have a good accounting advisor on your side.
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