As we have recently experienced, crises can come suddenly without warning or predictability. This can include natural disasters, widespread disease, or other sudden, economic downturns. Such circumstances can disrupt normal routines and certainly impact small businesses. Because the onset of these crises can occur suddenly and unpredictably, it is important to prepare your business financially while also looking out for your employees and team members. Take action in times of crisis with the following financial tips:
- Assess High Areas of Value – Take a step back and determine the areas of your business that drive the most value. Prioritizing these elements can help you assess what areas you want to keep your financial resources invested in versus areas where you can cut spending.
- Monitor Expenses – Cut your spending where you can and tighten your budget if possible. Separate your discretionary expenses from your fixed expenses. In other words, separate your needs from your wants and only spend where necessary.
- Proceed with Compassion – Naturally, we make budget cuts in times of financial crisis. Still, it is very important that you remember this crisis isn’t just affecting you and your business – your employees are in this too. Address your employees with compassion and make sure you take the steps to consider their mental well-being and financial circumstances as well. Once the crisis is over, the last thing you want lingering is a bad reputation for your company.
- Secure Access to Capital – Make sure to secure a line of credit in order to have extra working capital. Even during a crisis, it is possible to do this, especially if your financials are in order and you have established a strong relationship with a financial partner. Having a rainy day fund will also help in the future, should unforeseen impacts continue after the immediate crisis. An emergency savings fund with three or more months’ worth of expenses for your business is also a smart strategy to protect you and your business.
Financial crises happen. But when well-informed, we can respond and survive. Learn more about ways you can save money and address finances with financial support from our team at Bakersmith Bookkeeping today.