What to do when your business is losing money

My business is losing money – what options do I have?If your business is losing money and operating at a loss, it’s important to take immediate action to address the issue. The first step is to assess the current financial situation and identify the root cause of the problem.

You need to examine all aspects of your business, including sales, expenses, and operational efficiency, to identify areas that are contributing to the loss.

Once you have identified the problem areas, you can take corrective measures such as reducing expenses, increasing revenue, or implementing process improvements to improve profitability. It’s important to be realistic about the situation and set achievable goals and timelines for turning things around.

In addition to taking corrective measures, it’s essential to monitor your financials closely and make any necessary adjustments to your budget and cash flow. You should create a detailed financial plan that outlines your revenue and expenses and allows you to track your progress toward achieving your goals.

It’s also a good idea to seek professional advice from a qualified chartered accountant or insolvency practitioner, who can provide you with valuable insights into your financial situation and recommend appropriate strategies for improving your business’s financial health. With careful planning, execution, and a willingness to make tough decisions, you can get your business back on track to profitability

My business is losing money – what options do I have?

If your business is losing money, there are several options available to you to overcome making a financial loss. One option is to cut costs by reducing expenses, renegotiating contracts with suppliers, or downsizing your workforce. Another option is to increase revenue by expanding your product or service offerings, increasing your marketing efforts, or exploring new markets.

You could also consider refinancing your debt or seeking additional capital from investors or lenders to inject cash into the business. Alternatively, you may need to consider restructuring the business, such as merging with or acquiring another company, selling off assets, or even closing down the business.

Before making any decisions, it’s important to assess the financial health of your business and consult with financial professionals, such as an accountant or financial advisor, to determine the best course of action for your specific situation. With the right strategy and a willingness to make tough decisions, you can turn your business around and achieve long-term financial success.

Step 1: Sell more to existing customers

It may sound like a no-brainer, but your current customers are the key to driving immediate sales growth. Not only have you already spent money to acquire them, but they are also more likely to purchase from you again, given their existing trust in your business. For B2B sales, make sure to visit key customers in person – this can often lead to reorders or even expanded sales.

  • Utilising the 80/20 rule, focus on the 20% of customers who contribute 80% of your revenue.
  • Analyse your business data to determine the best buyers and customers with the greatest potential.

Implement a customer contact campaign to keep your business top-of-mind with your existing customers. Create an email database and send regular newsletters with exclusive deals and promotions just for them. Engage with your customers on social media, listen to their feedback, and make them feel valued.

By investing in your current customer base, you can increase the lifetime value of each customer and ultimately drive sustainable business growth.

Step 2: Find new customers

To attract new customers, consider the following strategies:

  • Identify the profile of your current top customers and use this information to target potential new customers.
  • Encourage referrals from existing customers by offering incentives for successful referrals.
  • Utilise social media and search profiling to create ads that target your specific demographic.
  • Launch a 90-day campaign to actively seek new clients using a range of promotions, direct contact, inbound and outbound tactics.
  • Profile your best customers to identify areas with similar demographics and target those areas for new business opportunities.
  • Identify potential business partners and share marketing costs to reach a wider audience.
  • Network and communicate with others in your industry to let them know you’re open to new business opportunities.

Step 3: Reduce costs

To improve cash flow by reducing costs, consider implementing the following strategies:

  • Obtain new quotes for all suppliers, including insurance, printing, and office supplies, as well as utilities such as electricity, heating, telephone, and internet services.
  • Contact existing suppliers to renegotiate lower prices and extended credit terms.
  • Implement “just-in-time” inventory methods to help reorder stock as needed, rather than buying in bulk.
  • Collaborate with another business to share resources, such as equipment and staff.
  • Hold a sale to move surplus stock and identify and sell underused assets. Leasing assets is also a viable option instead of owning them.
  • Consider discounting your outstanding customer invoices to a factoring company.
  • Lower your staff costs by outsourcing tasks like payroll and using contractors for project-related jobs.
  • Streamline your processes and utilize technology to make them more efficient. Identify any administrative tasks that can be eliminated altogether.

Step 4: Increase prices

To generate more cash flow, consider implementing the following pricing strategies:

  • Increase your prices by a small amount, such as 5%, across all products and services. This is a small enough increase to avoid significant disruption, but could add up to a significant gain if applied to everything.
  • Assess whether you can increase your hourly rate or add legitimate charges previously offered for free. If prices are confidential due to closed contracts, consider pricing differently for specific customers.
  • Review your range of products and services and identify those that are less price-sensitive. Increase prices for these offerings to generate more revenue.
  • Consider raising prices for products and services that customers view as necessary, as these items tend to have low price sensitivity. For example, people are willing to pay more for gas and tolerate price increases because it’s a necessary expense.

Step 5: Increase your cash reserves

To raise extra cash in the short term during a crisis, consider the following options:

  • Invest more of your own money in the business by raising funds against an asset you own, such as a property. Before risking more of your own funds, consult with your personal financial advisor and accountant to ensure you can afford to do so.
  • Raise cash from relatives, friends, or investors who believe in the potential of your business and its long-term benefits.
  • Sell part of your business to employees, other business owners, or investors who see potential in your company’s future growth.
  • Consider the possibility of a short-term loan to provide temporary financial relief. Consult with a financial advisor or lender to discuss your options and determine if this is a viable solution for your business.

Step 6: Review long term liabilities

If you’re looking to reduce expenses and increase cash flow, reviewing your long term liabilities is an important step. Here are some bullet points to consider:

  • Review all long term liabilities such as overdrafts, invoice finance facilities, and bank loans to see if there are more competitive rates available.
  • Speak with your bank or financial institution about the possibility of refinancing existing loans to take advantage of lower interest rates.
  • Shop around for alternative financial providers that may offer more attractive rates or terms.
  • Consider consolidating multiple debts into one loan to simplify payments and potentially reduce overall interest costs.
  • Before refinancing or consolidating debt, make sure to review the terms and conditions carefully to ensure that the new arrangement is affordable and suitable for your business needs.

Step 7: Speak to a finance professional 

If your business is losing money, it’s important to seek help from a financial professional to guide you through the turnaround process. Here are some options that can help:

  • Speak to your accountant or insolvency professional to assess the financial state of your business and to identify areas that need improvement.
  • Consider a business turnaround or restructuring plan. This can include a review of operations, staffing levels, and financial performance, and developing a new strategy to improve your business’s profitability.
  • If you’re struggling to pay taxes, you can apply for a time to pay arrangement with the tax authorities to spread out payments over a longer period of time.
  • In some cases, liquidation may be the only option. This involves selling off the business’s assets and distributing the proceeds to creditors. It’s important to speak to a financial professional to understand the implications and consequences of this option.

Read more: Independent business review – what are they?


When a business is losing money, it’s crucial that business owners act fast to prevent any further damage to the company. The longer you wait to address the issue, the more difficult it becomes to turn things around. Some of the steps that can help in such a situation include conducting a thorough review of the company’s financial situation, exploring opportunities to cut costs, exploring options to increase revenue, seeking financial and legal advice, and considering a business turnaround and restructuring plan.

It’s also essential to communicate with employees and stakeholders about the situation to ensure transparency and maintain trust. By taking proactive steps, business owners can help safeguard their company and position it for future success.

Steve Jones Profile
Insolvency & Restructuring Expert at Business Insolvency Helpline

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.