Is Your Small Business Struggling Financially? Here’s What to Do Next

KG Accounting
Jul 28
4 min read

small business owner holding a chart with accounting information at a team meeting

Running a small business is rewarding, but it can also be overwhelming, especially when money is tight. If you’ve ever found yourself saying, “My small business is struggling,” you’re not alone. Many business owners face financial stress at some point, whether from inconsistent cash flow, rising expenses, or simply not having enough time to focus on their numbers.

The good news? Struggling financially doesn’t mean failure, it means it’s time to take a closer look and make strategic changes. In this article, we’ll walk you through what to do next so you can stabilize your finances and set your business back on the path to growth.

Step 1: Get Real About Your Financial Situation

The first step in fixing financial problems is to know exactly what you’re dealing with. Many business owners avoid their financial statements because they feel intimidating, or because they’re afraid of what they’ll see. But ignoring the numbers only makes problems worse. Take time to:

Review your income and expenses for the last 3–6 months.
Identify your biggest expenses and look for any unnecessary or inflated costs.
Compare revenue patterns. Are there slow months that catch you by surprise?

This clarity helps you understand if your issue is truly revenue-related or if inconsistent cash flow and poor financial systems are the root of the problem.

Step 2: Fix Inconsistent Cash Flow

One of the most common struggles small business owners face is inconsistent cash flow, money coming in at irregular times while expenses are due on a regular schedule. You might feel “rich” one month and barely scraping by the next. How to improve cash flow quickly:

Invoice faster: Send invoices immediately after work is complete and shorten payment terms (e.g., Net 15 instead of Net 30).
Follow up on overdue payments: Don’t be afraid to remind clients when payments are late — it’s money you’ve already earned.
Offer easy payment options: Credit card or ACH payments can help clients pay faster.
Forecast your cash flow: Even a simple 90-day cash flow projection helps you prepare for dips and slow periods.

Need help getting a handle on cash flow? Download our free guide: 5 Hidden Cash Flow Mistakes Costing Small Businesses Thousands (And How to Fix Them)

Step 3: Focus on Profitable Activities

When money feels tight, it’s natural to try doing more to bring in more. But often, the issue isn’t working harder, it’s working smarter. Ask yourself:

Which products or services have the highest profit margins?
Which clients are consistently profitable (and which aren’t)?
Are you spending too much time on low-value tasks?

Focus on what’s most profitable and trim or automate the rest. This not only stabilizes revenue but also reduces the pressure on your time.

Step 4: Create (or Revisit) Your Budget

Many small business owners operate without a clear budget, leading to unexpected shortfalls. Even a basic monthly budget can help you plan spending intentionally and build confidence in your financial decisions. Budget essentials:

Separate business and personal expenses.
Identify fixed expenses (rent, subscriptions, payroll) vs. variable costs (marketing, travel, supplies).
Allocate funds for taxes and emergency savings.

A solid budget also helps you see if there’s truly a revenue problem, or simply a spending imbalance.

Step 5: Consider Fractional Accounting Services

If your small business is struggling financially, you don’t have to fix it all alone. One of the fastest ways to gain control is to bring in fractional accounting services.

What Are Fractional Accounting Services?

Instead of hiring a full-time CFO or accounting team, fractional services give you access to high-level financial support on a flexible, affordable basis. At KG Accounting, our fractional CFO packages include:

Bookkeeping and monthly financial statements
Cash flow forecasting
Strategic financial planning
Advisory support to help you make confident decisions

This means you get the financial clarity and guidance you need without the expense of hiring an in-house team.

Step 6: Build a Financial Safety Net

When your business is struggling, it can feel impossible to save. But even a small buffer can help you handle unexpected expenses or slow months without panic. Start small:

Set aside 2–5% of every payment into a savings account.
Treat your savings as a non-negotiable expense, just like payroll or rent.
Over time, aim for one month of operating expenses in reserve.

Step 7: Don’t Go It Alone

One of the biggest mistakes business owners make when struggling financially is trying to fix everything themselves. Having an experienced partner can help you:

Understand where your money is going
Identify hidden opportunities for growth
Make confident decisions based on real financial data

At KG Accounting & Consulting, we specialize in helping small business owners regain control of their finances through clear, actionable strategies.

You Don’t Have to Struggle Alone

If your small business is struggling financially, you’re not failing, you’re learning what it takes to run a business in real life. And you don’t have to figure it all out on your own. We can help you: