7 Ways to Panic – and 7 Tips for the Wise


Okay, your startup has gained traction and achieved some growth – but cash is about to run out.

It is time to panic –  but what is the best way to panic? Here are some light hearted solutions

1. Tell everyone! This could lead to widespread panic, so bolt the doors first!

2.  Tell no one! This might be bad for your health – who wants to keep all the problems to yourself?

3. Relish the moment – hey, its fun, right? You might just look a bit crazed and walk round the office laughing!

4.  Get yourself a payday loan – but this could be really serious if you can’t pay it back before it becomes due next month!

5. Call every business angel investor that you know and beg for money.

6. Start working night shifts. Okay, knowing what you know, you can’t sleep anyway, right?

7. Take up busking – but your team might recognise you on their way home!

 

Okay, okay, I know, none of these are serious solutions for a business with a cashflow crisis. So, let’s take a deep breath and see what we can do… Here are the questions that you might ask yourself

1. Does my business have a purpose, still?

In other words, is it still worth pursuing this business idea? Do I still believe – not that it will work (because it may or may not work) but that it is worth doing? You see, if you are engaged on important, world changing or life changing work, then perhaps you just have to do it?

2. Check in with your inner circle!

Who is in your inner circle?  Don’t have one? Then it is time to get one. An inner circle are the people you have worked with closely over time. They might include mentors or ‘father’ figures or non-exec directors. These are the people to turn to when things get tough. Ask them to help you remember why you started out on this project and ask them to add value to you at this difficult time.

3. Talk to your investors or top customers

Perhaps your business already has investors. In which case, you would naturally go there first. If you need more money, they are the team to approach. However, if you don’t have investors, you may find that your top customers would be willing to put money into your business.  Many customers don’t like the idea of good companies going out of business and would rather take a stake in your business than lose it altogether. After all, if all the companies go bust bar one, then the pricing power shifts to the remaining company and that won’t be good for your customers.

4. Can you land a big account?

It might cost you in discount – but if you can trade discount for speed of payment, this might be best and fastest way to cashflow your business. After all, as I was taught a long time ago, “there ain’t no problem ain’t solved by more sales”!

5. Crowdfunding?

If you have lots of small customers – or no obvious really large customers – like a membership newsletter or subscriber site – perhaps you should try crowdfunding? Here is a list of crowdfunding websites. A lot of people investing a little bit, can make a big difference to many companies. Also, if you have customers who really like your product or service, this extra step will turn them into evangelists for your business. This is super-powerful!

6. Innovation is learning

Remember, most innovation comes through failure. Now, this is where the rubber hits the road for you – but whatever happens, make sure that you learn some great lessons – they will stand you in good stead for the immediate and medium term future. If you ask ‘what did I learn from that’ each day – then you will gain immeasurably by the experience and will be the better entrepreneur for what you went through.

7. Check the insolvency law

Lastly, according to UK company law (and most countries will have similar laws – but do check) you are only trading insolvent if there is no feasible plan to raise the next round of funding. Hence, a business which is launching or running a successful (but not there yet) crowdfunding pitch which has run out of cash is not regarded as insolvent as it has the prospect of having enough money to carry on. Where ever you are, you need to understand the law and how it is applied.

 

 

 

 

 

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by Editor

Leader. Speaker. Trainer. Helping snr execs and entrepreneurs achieve their business and funding goals.

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