Running your own business brings with it a sense of freedom and achievement. But it also comes with some increased responsibility – especially when it comes to money.
This means that when cash flow takes a downward turn, it can be hard for some small business owners to keep their business afloat.
That’s why we’ve pulled together a list of a few practical things you can explore if you find your business struggling for cash.
1. Sell Vouchers for Future Use
If you’re unable to offer your services for an extended period of time - for example, due to sickness, a fire, or a flood – the money you had coming in might suddenly dry up.
Selling vouchers has been used by many businesses to keep at least some cash flowing when an unforeseeable crisis occurs.
Loyal customers will be keen to support you through a crisis and help you get back to business as usual – so will likely be more than willing to purchase a voucher or two.
2. Ask for a Payment Holiday
There are many mortgage lenders out there willing to offer mortgage payment holidays for a few months. If you're a homeowner and a change in circumstances has caused your earnings to become unstable, this can help lower your outgoings.
Your mortgage lender will take into account things like your financial situation, your mortgage contract, and their general terms. You should speak with them directly, or an independent financial advisor, for more guidance.
If you rent your property and are struggling to pay your rent, you should try speaking to your landlord to see if you can come up with a rent repayment plan.
3. Claim Your Allowable Self-employed Expenses
The annual deadline is 31st January to submit your Self Assessment tax return online, but you should keep it in mind throughout the year.
Keeping detailed records of your allowable expenses will mean you won’t let any business costs you could’ve claimed slip through the net.
4. Ask for More Time to Pay Your Taxes
If you’re up against some unexpected financial difficulty, you can contact HMRC’s Time to Pay service. It is available to all businesses experiencing financial distress that have outstanding tax bills.
If your bill is less than £10,000, you can request to pay in installments online. Otherwise, you can call 0300 200 3822 Monday to Friday between 8 am to 8 pm and Saturday, 8 am to 4 pm.
You can also contact the Payment Support Service on 0300 200 3835 during the same opening hours if you’ve received a letter threatening legal action.
5. Get Help with Your Debts
If you're struggling with business debt, you can contact the Business Debtline. This charitable service offers debt advice to self-employed people and small businesses in England, Wales, and Scotland – and it’s completely free!
6. Reach Out to the Small Business Commissioner
If your business has less than 50 employees, you can speak with The Small Business Commissioner (SBC). The SBC deals with complaints about larger businesses delaying payment to small businesses.
They’ll make recommendations on how the parties should resolve their disputes.
And there you have it, our list of ways you can try and sustain your business if you experience a dip in your cash flow.
Hopefully, working through them can help you keep your business going if you find yourself in a rough spot.
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