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A great percentage of businesses do record financial losses. This happens especially with startups and SMEs. This is because, at the beginning of every business, there are always setbacks resulting from financial challenges. At this stage, the business is still trying to kick off and make initial sales.

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Financial loss can also be recorded at any stage of a business. It could be due to mismanagement of resources, wrong investments and misplaced priorities. Whichever case, at some point in a business, there is a high chance of experiencing loss. In this article, I will highlight some ways you can deal with financial loss in your business. Let’s begin.

Identify the root cause

Identifying the root cause of any problem is the first step toward solving that particular problem. To recover from financial loss, you will need to identify the internal and external factors that must have led to the loss. It may be the decisions made within the business,a lack of competence on the part of the team, or just a market problem. It could be that there is a reduction in product demand and utility or that the economic environment is not enabling the business, thus, leading to financial hardship. Take some time to sit back and think of what caused the problem. It will be a good step in the right direction.

Understand the cash flow

Just like an understanding of the root cause of the financial loss is necessary, discovering the source of cash flow is vital. Cash flow can be regarded as the lifeblood of the business. Obviously, if you are not making money, there is no need for you to be in business.

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It is the revenue to finance your expenditure. One of the causes of financial loss is inadequate cash flow. Perhaps, you are investing heavily in the business but you are not getting the expected results, you need to check how cash is made. And if it is not, it becomes a concern.


This is not as simple as it sounds. It may not be easy to change your entire business model, make some tweaks, or change your sales strategies entirely. But in the long haul, you’d see that it might just be the boost your business needed. In the case of financial loss, it is necessary that you reassess your sales and growth strategies. Check for what is working and what is not. This will help you determine if and where to make the changes. For instance, if you noticed that email marketing is not helping you, but only taking more campaign resources, you might have to stop it and think of something else. As an entrepreneur, you should be adaptable and ready to move quickly with whats working.

Prioritize customer satisfaction

The reason for your business financial loss could be a result of a limited customer base.

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In this case, what do you do? It is as uncomplicated as giving more attention to the loyal customers you already have. Recall that in marketing, your loyal customers are your biggest fans and marketers. If you provide quality products and service, they will be willing to refer their close contacts to you. This is a big gain for you. So are you battling with inadequate customers? Treat the ones you have like kings and watch them promote your business effortlessly.

It is often difficult to deal with financial loss. With the discouragement and doubts that come with it, it could seem impossible. However, since we have treated some tips on how to recover from this mishap, I believe that when you effectively practice them, you will recover quickly.

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This article was first published on 11th July 2022


Chidiogo Shalom Akaelu holds a degree in English and Literary Studies, from the University of Nigeria. She is a freelance writer, editor and founder of Loana Press, a budding online publishing outlet.

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