How You Can Work On Your Budget If You Are In Financial Crisis?

No one wants to see his business at the verge of financial crisis. Even if you are a manager or owner of a business, financial crisis is like a terrible nightmare. In any business, there are good days and bad days and financial crisis is a natural phenomenon. According to some sources, almost every Dubai freezone company setup passes through a phase of financial crisis, once in its life time. This is a situation where managerial skills are truly verified. Financial crisis is a testing challenge and managers have to make some crucial decisions like revisiting of the budget to cut expenses. Efficient budgeting injects some fresh and managers get more space to make decisions. 

However, there are some considerations that must be noted to make it more effective. I am listing down some of these notables to get maximum results.

Crisis Resource Management:

Crisis Resource management is basically a medical term but actually,it is a set of non-technical skills required for an effective teamwork in a crisis situation. CRM improves performance and reduces errors and expenses. Organizational crisis management is a detailed series of procedures to sustain or resume normal business operations, minimize stakeholder loss, cut expenses and use learning to improve current performance. Following are some of the duties of HR Managers in financial crisis situation:

• Identify and respond to early signals of financial crises to prevent subsequent business losses. 

• Systematically plan and prepare and provide an effective crisis training to teams which includes business continuity plans.

• Assure partial or full business operations and help stakeholders to recover.

• Establish plans to keep employees engaged during business recovery. 

• Keep the Morale of teams and ensure maximum productivity. 

Cut Surplus Expenses:

Cut all the surplus expenses and be more accurate. Have a look at your wastes and try to recycle them. Its two ways advantageous, firstly this practice is environment friendly and has a positive impact on your reputation and secondly, you might be able to save a handful of money. A lot of money can be saved by taking following steps:

• Equitable use of office equipment.

• Minimize electricity and power consumption

• Move to cheaper energy sources like solar or wind energy. 

• Buy used equipment

• Negotiate low prices with your suppliers

• Use cheap sources of marketing like email marketing, social media and internet marketing.

• Move your business to free zones if provided in your country to get rid of extra taxes. Like a free zone company setup UAEhas no taxes to speak off. 

• Hire interns or have freelancers onboard. Their rates are relatively less and deliver high quality services at low cost.

• Outsourcing

Weekly Audit

There are numerous benefits of audits especially in financial crisis management. Audits can improve a company’s efficiency and profitability a lot by helping the managers to better understand their own working and financial arrangements. The management, as well as stakeholders, suppliers and financers, is also assured that the risks in the organization are well-studied and effective systems and plans are in place to handle the crisis situation properly. Audit will help in you following ways:

• Provides validity and helps to analyze and understand the company’s financial records.

• Discovers errors and Identifies major areas for improvement in your company.

• Educates business owner about the assess risks, economy, efficiency and quality.

• Uncovers fraudulent or other illegitimate activities within your company.

• It Reinforces and strengthens the internal control of managers.

• Limits legal and tax issues.

Always Have A Sustainability Plan:

In financial crisis situation, it’s very beneficial to have a sustainability plan. The most vital stakeholder in any business is a bank. Every business owner always wants the backing of a bank on its backend in financial crisis. What bank is looking in you is, are you sustainable? From the Bank’s point of view, more sustainable is more bankable. A sustainability plan is an asset for any company in hard times. A sustainability plan will ensure your stakeholders that your business will make out of this financial crisis.

Sales Enablement:

Sales Enablement is an effective tool that helps sales person to sell more effectively. The fundamental principle of sales enablement to provide Sales team the basic training and all the resources required. When your company is in financial crisis never cut the budget for sales enablement. A sales person is like the face of any business and he must look good no matter what the conditions are. In such circumstances, negotiate on quality or on quantity but never compromise on the budget for sales enablement.

In financial crisis, the best way to save money is proper budgeting. Keep all the above-mentioned points in your mind to get maximum results.

Brenda Cagara is a part of the business consultant team in Dubai. Her work is to assist the formation of companies and help setting up business firms. Other services she takes a part in are visa processing, trade license, trade mark, bank account opening, product registration and local sponsors. Along with this, she vigilantly manages to pursue her writing career. Since the past five years, she has been writing on different niches. The top ones are finance, business and taxation.