Businesses go through tough phases all the time. There’s no doubt about it. It could be because of changes in the industry, or it could be due to a drop in sales and revenue.
Data from the U.S. Bureau of Labor Statistics (BLS) shows that every year, around one in five businesses fail. By their fifth year of operation, almost 50% of U.S. businesses fail. Regardless of what caused your business to lose money and experience losses, there are things you should never do in such situations.
Here’s a quick look at these things and why you must avoid them given the circumstances:
Panic
Panicking is never the answer. When your business is facing a crisis, it’s easy to get overwhelmed and start making decisions without thinking them through. Resist the urge to panic, and don’t do anything hasty or rash. Your best bet is to stay calm and make sure you’re being realistic in assessing your situation, and then take an honest look at your options.
For example, if you’re struggling financially but don’t want to give up on your business, consider liquidating assets instead of selling off all of your stock at once.
This can help keep some cash flowing into operations while giving you enough time to recover from financial losses without going under completely. It also allows for more flexibility than other options, like filing bankruptcy or declaring bankruptcy protection.
A good example of resisting the urge to panic in such times can be the recent case of Adidas terminating their contract with American rapper Kanye West. The company is to suffer a loss of around 250 million Euros for this course of action. Yet, they deem it to be necessary and are calm about it.
Behind the scene, of course, Adidas has its top executives working out ways to recover from this loss and move forward much stronger.
Blame Someone
Blaming someone else for your losses is never helpful. It’s an inefficient use of time and energy, and it won’t solve your problem or help you move on from it. Instead of making excuses for yourself or pointing fingers at others, take responsibility for the situation at hand and learn from it.
Practicing humility in times of hardship is one of the core teachings in The Book of Philippians. That’s why devoted Christians running businesses and suffering financial losses never point fingers at others for selfish ambitions.
Instead, they take responsibility for their own circumstances and work out ways to deal with them accordingly. Anyone suffering from such financial losses can learn a thing or two from the text in the Book of Philippians.
Whether you’re a devoted believer or from an entirely different faith, it’s never wise to put the blame on others in such tough situations.
Stop Investing in Your Business
It’s easy to get caught up in the day-to-day tasks of running a business and forget about what is really going to help your company succeed. The truth is that you need to invest in your business if you want it to succeed. It’s simply not possible for anyone to build a successful company without investing time, energy, money, and other resources into their venture.
It would be nice if every decision you made was perfect, but we know that can’t happen all the time. When things go wrong with your business, look at these mistakes as learning opportunities instead of letting them discourage you.
Deny That It is Happening
If you can’t change the past, your business will be in trouble. To prevent this from happening, you need to look forward and be realistic about what is going on with your company. Never try to gaslight yourself into believing that all that’s happening isn’t real or will pass away without any effort from your end. If there were any factors that led up to this point (like bad management or poor decision-making), try to learn from them and make sure they do not happen again in the future.
When facing losses, it’s easy to become overwhelmed by all of the things that could go wrong instead of focusing on what needs to be done now. Asking others how they would handle similar situations can also help generate creative solutions. However, keep in mind that nobody else knows exactly what’s going through everyone else’s head.
Hide Your Losses
Honesty and transparency are important when it comes to dealing with losses in your business. You should be honest with yourself about the factors that contributed to these losses. Once you’ve figured out what went wrong, start working on ways to prevent similar problems from happening in the future.
The emotional aspects of facing up to losses can also be overwhelming for some people. Be sure not only to take care of yourself during this period but also to reach out for help if necessary. Whatever you do, don’t hide the losses from anyone, especially your investors. As history would suggest, these things don’t remain hidden for long and eventually backfire.
Even recently, a businessman in Detroit is facing charges for hiding losses from over a hundred of his investors. He was losing millions while assuring his investors of positive returns. As it now stands, hiding the losses has backfired on him, and he is now dealing with multiple lawsuits filed against him.
Give Up
Never, ever give up on your dreams and aspirations. If your business is struggling through hard times, you have to keep moving forward and pushing through it. Don’t let the thought of failure or success stop you from doing what’s right for your company or yourself as an individual.
If your business is facing huge losses, keep a cool head, take action and learn from the situation. There are many ways to deal with this situation, but it is important that you pick your options wisely and don’t do anything without assessing the situation first.
