Small Business Survival: Last Chance Lifelines for Keeping your Business Afloat

There are many reasons why businesses fall on hard times; and i-s not always the fault of the broader economy.

Poor management, a bad location, over-expansion, insufficient capital, or a lack of planning- many of these factors, if not avoided, can certainly weigh down a business or even sink it.

If your business is experiencing financial difficulty and is struggling to survive, here are some steps you can take to keep the creditors and the IRS from your door, as well as some potential lifelines and'refres' business strategies that can help you stay afloat.

Managing Cash Flow

Getting a grip on cash flow is the first essential step towards positioning your business for survival and future growth.

Start with an assessment of your short-term cash flow and develop a plan for your immediate needs. This includes taking stock of all outflows' including credit card bills, utility and commercial lease commitments, bank loans, employee payroll, taxes, etc.' together with an assessment of your incoming cash flow and a plan for prompt collection of payments owed.

If you need to delay payment of other bills, try working with your suppliers to reduce rates, or implement a payment plan that gives you time to get back on your feet.

But, however severe your cash flow issues are, try to be meticulous about paying taxes, particularly those associated with employee payroll. The IRS holds business owners liable for unpaid employment taxes, whether you are incorporated or not.

Below are some excellent resources to help you manage your business cash flow and take control of your business finances before they take control of you.

• Understanding and Expanding Cash Flow - Learn how understanding your cash flow trends can help you take control of your business finances.

• Bookkeeping Basics for Small Business - Proper bookkeeping practices are important to the operation and survival of any business. Without them, your business is susceptible to not only cash flow issues, but potential legal problems as well. To help business owners have a better understanding of smart bookkeeping practices, read this quick 101 in bookkeeping basics.

Leverage Financial Lifelines

There are several financing lifelines that can help small businesses overcome short-term cash flow problems or help alleviate existing debt. These include:

• Revolving Lines of Credit (RLC) - A revolving line of credit (RLC) is a flexible method of borrowing cash for your small business. It is very similar to a credit card in the sense that an RLC has an established credit limit that you can borrow up to, only without a plastic card. Although do note that to receive an RLC you must be operating profitably. Read'The Basics of Revolving Lines of Creditto learn more about how you can apply for and take advantage of revolving lines of credit.

• The ARC Loan Program - Interest Free Loan for Debt Repayment - Backed by the SBA, the ARC Loan program was introduced in 2009 to help small business owners who are struggling to pay the interest on existing loans and debts such as credit card bills, capital leases and other loans made without an SBA guaranty. The program provides interest free loans of up to $35,000 for up to six months. Read Managing Small Business Debt' Government Loans and Refinancing Lifelines for more information about this and other programs from the U.S. government.

Learn from other Small Business Owners

If there is one thing that the current economic uncertainty has demonstrated, it's that entrepreneurs are fighters. From customer service to marketing; from creative uses of technology to tighter financial controls - small businesses are fighting back with a toolbox of resources that challenges conventional business models, introduces greater efficiencies, and opens doors to new opportunities.

Read Surviving the Recession and Planning for a Rebound - How Small Businesses are Doing It! for some insights and tips drawn from across the Business.gov Community of experts and small business owners.

Additional Resources

• Running a Seasonal Business - Thriving and Surviving Year-Round
• What Happens when I Default on a Business Loan?
• Handling Employee Layoffs as a Small Business Owner
• Bankruptcy Options for the Small Business Owner - Explains what bankruptcy is, how it works, and can help you determine what bankruptcy options are available and helpful for your business model.
• Have an Exit Strategy - If the time has come to exit your business, read Getting Out - Developing a Business Exit Strategy that Anticipates the Expected & the Unexpected to prepare and plan for the impact on your employees, your business structure, its assets, and your tax obligations.
• Managing Small Business Finances - This guide from Business.gov covers everything from where to get business credit to accepting forms of payment from customers, and more.

About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley