Financial Issues You Can Expect to Encounter in Business

Top Financial Issues SMBs Continue to Have and How to Fix Them

Businesses all come down to one thing in the end, that’s their financial positions. Everyone is in business to make a profit. Those that are not are still seeking some sort of funding in order to keep the business afloat. Finance is what keeps the business going. Owners invest, the business produces, customers buy, and the cycle continues. Sometimes finance can also bring trouble to the business. It is very important to stay ahead of the financial health of company to avoid any potential hiccups. Financial issues that can cause confusion in your business include third party financing, marital dissolutions, and shareholder issues.

Third Party Financing

At times, the owner and a select few others is the only one that is realizing the financial struggle a company is under. If the business is a family run business, it might be even more of a secret. Private companies like restaurants and small retail shops may have an easier time privately drowning in debt. The only way someone else gets involved is when an outsider comes in a notices the books, or if the owner decides to go for a loan and needs to involve another person for signature. This surprise can bring about lots of bad feelings and discussions.

Marital Dissolutions

Spouses who share a business may find it a bit tough in the event that their marriage fails and they are stuck trying to figure out how to divide business ownership. There is a lot to sort out regarding the valuation of the business, retirement amounts, spousal income, and any long-term planning. When there are a lot of assets involved, sometimes it’s good to bring in financial experts to assist the spouses and their attorneys on the best way to divide everything fairly.

Shareholder Issues

Shareholders can be a tough crowd when they are not the ones directly operating the business. Chief executives can find themselves in a situation if they are not making the right decisions, if the stock value is not climbing, and if the shareholders are not seeing a bright future with the investment. Shareholders are also concerned about fair share amounts. Everyone wants control, but there will only be a few people who are hands on and running the company. If your company is having several shareholder disputes, get help before the chief executive is asked to step down. Try searching for business valuation services if needed.

As businesses grow, they can be tougher to run. That’s why we get involved with teams. The problem with teams is everyone wants their voice to be heard. You can’t please everyone all the time. Eventually, someone will be disappointed. Depending on the type and level of disappointment it can be disruptive to business and you will need outside advice. Smaller companies should go ahead and have open communication from the beginning so everyone knows where the company stands. Surprises are usually what causes confusion in the more intimate businesses. Financial issues that you can expect to see with businesses include, third party financing, marital dissolution and shareholder disputes.