You’re struggling to keep your business afloat. How can you get back on track?

1 Analyze your current situation

The first step to getting back on track is to understand where you stand right now. You need to review your income statement, balance sheet, and cash flow statement to see how your business is performing and where the problems are. Look at your sales, costs, profits, assets, liabilities, and cash flow. Identify the trends, patterns, and gaps in your financial data. Compare your actual results with your previous projections and goals. What are the main drivers and challenges of your business? What are the areas where you can improve or cut costs?

2 Create a realistic budget

The next step is to create a budget that reflects your current situation and your future plans. A budget is a plan that shows how much money you expect to make and spend in a given period, usually a month or a year. A budget helps you to allocate your resources, control your expenses, and monitor your progress. To create a realistic budget, you need to estimate your revenue and expenses based on your past performance, market research, and industry benchmarks. You also need to consider your fixed and variable costs, as well as your one-time or recurring expenses. You should also include a contingency fund for unexpected events or emergencies.

3 Forecast your cash flow

The third step is to forecast your cash flow, which is the amount of money that flows in and out of your business. Cash flow is crucial for your business survival, as it affects your ability to pay your bills, invest in your growth, and deal with uncertainties. To forecast your cash flow, you need to estimate how much money you will receive from your customers, and how much money you will pay to your suppliers, employees, and other creditors. You also need to account for the timing and frequency of your cash inflows and outflows. You should aim to have a positive cash flow, meaning that you have more money coming in than going out.

4 Adjust your strategy

The fourth step is to adjust your strategy based on your budget and cash flow forecasts. You may need to make some changes in your business model, pricing, marketing, operations, or product development to improve your financial performance and meet your goals. For example, you may need to increase your prices, reduce your costs, diversify your income sources, negotiate better terms with your vendors, or innovate your products or services. You should also evaluate the risks and opportunities that may affect your business, such as changes in customer demand, competition, regulations, or technology.

5 Track and review your results

The fifth step is to track and review your results regularly. You need to measure and compare your actual performance with your budget and cash flow forecasts. You also need to analyze the variances and the reasons behind them. Did you meet, exceed, or fall short of your expectations? What worked well and what didn't? What are the lessons learned and the best practices to follow? You should also update your budget and cash flow forecasts based on your current situation and your revised plans. You should also communicate your results and feedback to your team, stakeholders, and investors.

6 Seek professional help

The sixth and final step is to seek professional help if you need it. You don't have to do everything on your own. You can hire or consult an accountant, a financial planner, a business coach, or a mentor to help you with your budgeting and forecasting skills. They can provide you with expert advice, guidance, tools, and resources to help you improve your financial management and decision-making. They can also help you avoid common mistakes, identify potential problems, and find new opportunities for your business.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?