Get the right advice

This is no time for emotional decisions or gut feelings – you need smart advice from an accountant or financial advisor. If your business is worth saving, dig your heels in and be prepared to fight for it.

Prioritise your budget

Strip away the frills and get back to business basics. What are the most important expenses to cover and critical revenue streams to keep on tap? Salaries and staff costs need to take priority. Otherwise you’ll risk legal action and be without your best employees when you need them most.

You need to prioritise your own salary too. A temporary pay cut is fine if you’re struggling, but your family finances need to stay above water as well.

Keep suppliers and customers onside

Building positive relationships with suppliers and customers helps when you’re in a tight spot.

Communicate with your suppliers if you need an extension on your bills. Put yourself in their shoes – you’d rather know your customer was working towards solving an issue than be chasing an overdue invoice and getting the run-around.

Follow up on invoices from customers as they become due. Don’t wait until they’re overdue, and take advantage of automated reminders to prompt payments.

Take the opportunity to review your payment terms for new customers – moving from 30-day to 14-day terms could make a big difference to a healthy cash flow.

Prospa tip: Pick up the phone and talk to your suppliers and customers. A human touch helps keep business relationships on an even keel.

Take stock

If you’re a small business with inventory, do a stocktake and think strategically about sales to boost your revenue. Be smart about discounts and don’t sacrifice your seasonal stock with a large profit margin for a small income boost.

Prospa tip: Resist the temptation to raise your prices to make some quick cash. Price changes may be part of a longer-term strategy, but they are unlikely to make an immediate difference.

Taxing times

If an unexpected tax debt is part of your money issues, the ATO can be surprisingly understanding. As long as you stay in contact, you or your accountant can negotiate payment terms for a tax or GST debt that’ll help you get back in the black.

Get a cash flow boost

After you’ve made a plan to work out your money issues, you’ll likely need an injection of funds to get started. It’s time to look at a cash flow loan from a reputable lender who understands small businesses.

Money management

Aside from a cash flow loan to inject some immediate funds, take charge of your debts by looking into:

  • A temporary increase in an overdraft limit.
  • Debt consolidation options.
  • Changing loan repayments from principal repayments to interest only – you can switch back when the books are balanced.

Cut back where you can

As well as big-ticket items like loans, think small and put any non-essential software or app subscriptions on hold. If you’re paying by the month, some respite can boost the coffers. And if you don’t miss the services, don’t switch them back on.

Prospa tip: Tightening your belt doesn’t mean sacrificing essential money management services like your cloud accounting program. You need it more than ever to keep track of money coming in and out.

Small business strength

Your small business is one of over 2 million that are the backbone of Australia’s economy. You and your business matter. Use your strength and resilience as a small business owner to face your money issues head-on and get out of a tight spot.