Every organization at some point in time has to aggressively defend its turf and in this scenario, it is important that you have your finances in order. After all, the wars have always been won with gold. Here are the few things that you can do to get your war chest ready:
Forewarned is Forearmed
To get you war chest ready, it is very important to foresee the future and observe the signs of coming troubles. These could be a sudden dip in sales due to market conditions or entry of new competition or changes in Government policies, etc. If you are able to-foresee it, you will be able to prepare for it.
Eagle view over Overheads
Once you go into the war mode, you need to have an idea about the key expenses you will be incurring. In most of the situations, the money is diverted towards focused marketing, additional sales incentives and advertisement activities and resultant cost overruns. Hence, be clear what your cost budgets are for these activities and how to mitigate any cost overruns. The budgetary controls act as a line that you should not cross. If you do not draw a line, you will end up spending way beyond your means. This could bring irreparable harm to your company.
The Bare Essential Analysis
To come on top with the competition, it is important to understand the fixed cost in the organisation and keep it under control. In these critical moments, you need to know how much working capital is required to take care of the bare essential activities in the company. This bare essential analysis will help you break down your normal expenses and create a sound financial budget to keep other functions of your company running smoothly.
Think of Cash (or cash equivalents) as the essential blood pumping through a body as it fights a battle. As long as the blood is flowing the body is fighting. Make sure that you have enough cash by applying for appropriate loans or credit.