Low on Business Funding? 3 Things That You Shouldn’t Do

business funding

Worried that your business funds are running low? Not only do you need to act fast but you also need to act smart to save your business financially.

Most scale-up companies and SMEs will have periods within their life where funding becomes low – for example Apple came very close to actually going bust in 1997. It’s a natural part of business which isn’t necessarily a problem within itself. The problem comes if, when your business has low funds, you react badly and make poor decisions. 

This article aims to help you focus on the solution with the right kind of mindset. That way, you are able to objectively assess your business’s situation so you can create an actionable strategic plan to overcome the problem and move forward.

Here are the three things you shouldn’t do when you’re low on funding.

1. Don’t Panic

Though it’s obvious and often much easier said than done (hear us out) — don’t panic. You need to know there are solutions out there, but you need to take a moment to evaluate which of those options appropriately fit your situation. 

A common panic ‘solution’ is to implement a rushed cost-cutting in parts of your business that haven’t fully been thought through. You must, before making any cuts, look at your financial reports first so you can make a better informed decision. 

Looking at the financial reports puts you in a better position to see what is and isn’t working within your business. If you do decide to make cuts, then let it follow a proper financial report assessment.

Instead of panicking you should take time to evaluate where your business is at the moment and where you want it to be; and this is where an oldie but goodie business tool can come in handy — SWOT. Through this tool you would be able to evaluate the strengths and weaknesses of your business. In the face of being low on funding, you need to be honest about both these pillars of SWOT because these will be key to getting your business out of the financial challenge. 

Within SWOT you will also be looking at the external threats but also the opportunities there are for your business. Maybe there’s a new round of funding for scale-ups or a potential interested investor you can look to contact and begin a relationship with. 

The process of SWOT works best as a brainstorming exercise with as many members of the board involved as possible. It should be a safe atmosphere where every idea is written down because from this, you can then whittle down to the best suggestions. 

Being low on funding can also be demoralizing for a business so this exercise is a great way to remind yourself of the business’ strengths. What has worked in the past and what can be taken on with your future decisions.  

2. Don’t Instantaneously Take Out Loans

When you’re low on funding, it can be tempting to try and rectify the issue you face by applying for loans to immediately boost the business budget. This can be a very costly mistake. 

You must think about the priority needs of the business and it is likely these rushed loans will not help you in the long run. If the loans just prop you up momentarily but don’t help you fix the priority needs of your business then soon you will be back in the very same position — only this time, with an amassed copious debt. 

Being low on funding is, in many ways, a business crisis. Although that may sound extreme, the use of the Crisis Strategy Assessment tool can help you break down your business’s issues into specific sections so that you may begin to navigate your way out of the problem.

Here are the questions that the Crisis Strategy Assessment asks you (when reading them keep in mind that your ‘crisis’ would be running low on funding):

  • How will this crisis affect or have affected your revenue streams?
  • How will this crisis change or has it changed your value proposition?
  • How will this crisis alter or has it altered your customer segments and relationships?
  • How will this crisis alter or has it altered distribution channels and partners?
  • How are your resource needs going to change or have they already changed because of the crisis?
  • How is your cost structure going to be affected or has been affected because of the crisis? 

Being low on funding can seem overwhelming which hinders focus and objective decisions. The Crisis Strategy Assessment facilitates your evaluation of the crisis you may be facing —in this case, the lack of funding — and puts you in the best place to begin making your actionable plan for growth.

3. Don’t Address the Short-Term Issues Without Thinking About the Long-Term Plan

In times of crisis, it’s understandable for business owners to look for quick fixes as a fire-fighting exercise. However, this mindset is not built to withstand time and is not the way to ensure your business can move forward from this situation for a sustainable future. 

Often short-term fixes cause more trouble further down the line, sometimes even greater problems than previously encountered. The key here is to make an actionable plan to set in place the structure for your business to progress and improve for the long run. The best way to do this is through the MOST analysis tool. 

MOST ensures you focus on your long term goals and the practical ways to reach them. Here’s a quick rundown of each section from this tool:


This is where you want to be by the end of the plan you will create — your business’s future state. Keep your mission relating to turnover and profit as that is quantifiable and easy to evaluate. You should also give your business a timeframe when deciding on your mission so you can measure and analyze your business’s journey. 

It’s important not to confuse your business vision with your mission. While the direction you want your business to head in and principles of your business are very important they are difficult to measure and evaluate. Keep your mission to your profit and turnover with a specific timescale. 


Your objectives are the steps you know your business needs to take to achieve your mission. Don’t worry about the ‘hows’ yet. Just plot out the journey that is necessary to achieve your mission. 

When deciding on your objectives, remember the ‘which wills’. This means writing down why each of your objectives is important to achieving your mission. So one of your objectives may be to get financial investment which will allow us to grow our business. 

This should begin to map out a road for your business to travel down in the coming year. 


This is the point that you will begin to think of the ‘hows’. Now you’ve got a list of your objectives, you must start brainstorming ideas of how you may achieve them. 

If an objective is to gain investment from a funder then how would you do that? Perhaps you would spend time identifying ideal funding partners, or begin to develop your pitch deck in order to attract investors.

For each objective that you have you should also have at least two strategies that could help you achieve them. This is to give your business options because as you will know, not every strategy will pay off but if you have another strategic route to go down then your business will be in a strong position. 

In terms of funding, it is crucial to assess all the funding options.


This is about putting your strategies into action. It is where you decide on the ‘who does what and when’. It’s all very good having a concept of a strategy but now you need to delegate in order to progress. Everyone in the business should know their role and what they have to do. 

The difference between strategies and tactics, which sometimes are confused to be one and the same, can be made clear through this metaphor:   

Consider your business as an ocean liner. The strategy of your business is to sail from the UK to Spain and the tactics are the precise steering and navigations on that journey. To complete this metaphor in terms of MOST; your mission would be the decision to get to Spain, and the objective would be to go via the sea.

The MOST Analysis tool along with SWOT and the Crisis Strategy Assessment can be downloaded in this Business Strategy Toolkit for free to help your business move forward today.

To conclude

Being low on business funding can be a stressful time for any business owner. It is important to know that many successful companies have been in that position at one point. The way to navigate the crisis is to calmly, and with focus, evaluate where your business has been, where it is right now, and how you can create an actionable plan to move forward sustainably. 

You must not make rash, panicked decisions that may only solve a short term problem. Evaluate and create an actionable plan as a business through SWOT, the Crisis Strategy Assessment and, MOST analysis. 

If you want to take a closer look at business’s financial strategies you can also take the free Financial Diagnostic to receive a personalized report providing suggestions for how your business could improve.


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