At this point during the global pandemic, especially if you’re a small business owner, it’s easy to feel overwhelmed by financial commitments. Most business owners are struggling both personally and professionally, and if you do fall under this category, know you’re not alone. As you search for the best ways to stay above water when it comes to your bills, take some time to reset, run the numbers, and evaluate all of your options.
Run the Numbers
Though you may have already done so at the beginning of the current crisis, it never hurts to run the numbers again, and again. It’s important to know exactly what you’re working with in order to have a clear image of the future.
From cash flow and net income, to your profits vs. your loss, now is the time to have a clear understanding of where your business stands financially. Whether you run the numbers yourself, or you work with a financial advisor/accountant, don’t sugar coat it. If you have taken significant financial hits as a result of the crisis, determine how much cash you might need in the future to make up for such losses. Companies that haven’t endured any major damage when it comes to revenue should always assess sustainability. If you know your current mode of revenue is not sustainable long term, you should be putting plans in place now to ensure the safety of your business.
During this time, both your personal and professional lives are now converging. With most if not all businesses working from home, it’s not uncommon for your personal financial commitments to feel overwhelming on top of your business. Should you be worried about your personal finances, take the time to run your own numbers on monthly expenses as well. Develop a monthly budget for both yourself and your business to determine how to stay on track, or how to get back on track in most cases.
Identify Financial Support
There are numerous modes of financial support for both your own finances and your business’, so be sure to take advantage of them.
If the state of your business is such that you would require financial support, there are plenty of emergency loan options available for you to assess. Beyond the government’s offerings, other lenders are also rolling out support for their borrowers. Check if your current lender has a financial support program during these times. On a personal level, many credit unions are offering 0% interest on outstanding payments, and if you’re eligible, you should also be looking out for a stimulus check to help support any other personal losses.
Now more than ever, it’s crucial to be strategic about the way you run your business. Whether you hold brainstorms with other employees or come up with new ways to navigate these times on your own, adapting is how your business will survive. If you’re finding that productivity has decreased while your business has been functioning remotely, be sure to survey your employees to ask why this might be. Beyond this, research the methods of other businesses who somehow seem to be thriving amidst the pandemic. What are they doing that you may have overlooked? Many businesses have found ways to offer their products and services as a subscription service, allowing them to ensure consistent revenue and to stay adaptable to the times.
If you’re finding you need to be more strategic about your personal finances, look for creative ways to pay off some of your larger financial obligations. Beyond deferring what you may not be able to pay, there are other ways to tackle these stressors. Call your proper providers whether this be for your mortgage payment or your insurance to see if they are offering any discounts or even temporary payment plans for the next few months. Should you have a child or family member struggling with student loans, research other clever ways to supplement such costs by looking into alternative options, like your home equity. Apart from the relief most organizations are offering for payments, there are still plenty of other strategies to research in order to lessen your financial burdens.
Did you have a set of goals for your business at the beginning of the year? It’s time to reevaluate. While it might be difficult to set aside the goals you were working towards, it’s important to develop new aspirations for yourself in light of the current crisis. An important goal to have during this crisis is improving the credit of your business as well as your own personal credit score. Should you be able to defer payments on leased office space and product at this time with zero interest, it’s probably in your best interest to look for ways to pay off any outstanding debt you may be in with any extra income you have to spare. Beyond this, look for reliable ways you can continue to establish good credit in the future both in business and on your own. From working toward establishing better trade credit with vendors to paying off a personal credit card, be sure to set goals for yourself and your business that are attainable and impactful on your financial wellness.
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