4 Ways To Not Be The Next ‘Big Time’ Economic Offender
It’s common knowledge that businesses face cash crunches and issues with capital from time to time. With money issues comes a myriad of other issues that may lead to defaulting of loans and economic offences eventually. Such issues can come knocking on your door anytime, whether you are a seasoned businessman or a first time entrepreneur. And nobody wants to find themselves tagged as a “big time” economic offender.
On 1 February 2017, Union Finance Minister Arun Jaitley announced the fourth and probably the most important Budget of his career. In his speech he announced an important proposal to introduce a law that would protect India and its people from offences affecting the country’s economy:
“In the recent past, there have been instances of “big time offenders, including economic offenders”, fleeing the country to escape the reach of law. We have to ensure that the law is allowed to take its own course.
The government is therefore considering introduction of legislative changes, or even a new law, to confiscate the assets of such persons located within the country, till they submit to the jurisdiction of the appropriate legal forum. Needless to say that all necessary constitutional safeguards will be followed in such cases,” Jaitley said in his budget speech.
This could spell trouble for a lot of business owners everywhere. So what can you do to ensure that you don’t find yourself in such a situation?
Ensure a healthy cashflow
Businesses are often guilty of prioritising their business goals above a healthy cash flow. You need to have money for the long run without which all your business strategizing will be of no use. You can read more about improving your cashflow here.
Make a budget
List out every possible expense associated with your business. From the purchase of equipments and factory floor wages to every cash inflow and outflow. Account for every penny you intend on spending and stick to it. And what’s even more important? Make timely payments on every item purchased to stay on top of your expenses.
Keep your lenders close
Surprised? You never know when you would need that financial boost to keep your business running smooth! It’s wise to stay friendly with banks and lending institutions so that they treat you favourably should you need any financial assistance.
It is also important to keep yourself in the know about new alternate routes of raising working capital. KredX provides one such alternate route. We are India’s first invoice discounting marketplace that gives businesses a platform to get in touch with investors. You can read more about KredX here.
Settle your debts
What if despite your best efforts your business faces an unexpected cash crunch? Oftentimes it’s more important to settle your debts than focusing on profits. Negotiate with whoever you owe money to as anybody familiar with the business world can empathize with how tough it is to keep your business afloat.
So, now you know what to do if your business faces any financial trouble! It is vital to anticipate any problems your business could face. Be prepared for unfavorable circumstances by keeping a regular check on every aspect of your business and you’ll be on your way to success in no time!