6 Tips For Small Business Owners To Survive A Financial Crisis
As an entrepreneur, there are many things that you have to worry about. Finances are usually at the top of this list as it’s what keeps your business in motion. Many businesses are one financial crisis away from losing everything they have worked hard for, so it is important to know how to handle one. Today, we are going to look at 5 tips on how to survive a financial crisis as an entrepreneur.
Special thanks to Thimble for this content and visual!
Keep An Emergency Fund
One of the best things you can do to survive a financial crisis as an entrepreneur is to keep an emergency fund. While some will want to go all-in on their new venture, having some cash stashed away for a rainy day (or months) can help keep your business afloat. Having at least 6 months of emergency money can help you get through some of your toughest times as an entrepreneur.
Do Some Serious Outreach
If you are in a financial crisis or feel like you may be in one soon, it’s time to start reaching out to people. Find your old list of clients, cold call potential clients, even try to rekindle clients who may have fizzled out over the years. The best way to avoid a financial crisis is to keep your business moving forward by any means necessary. This is going to be the time to be hitting pay dirt and getting business coming in.
Spend Your Time Wisely
When things with your business are running smoothly, it is much easier to take some time to try new things or experiment with new processes. When in a financial crisis, every minute matters. To get money flowing into your business, you are going to want to spend your time wisely and make sure each action you are taking results in money being made or saved. This may require you to work some overtime or cut down your lunches to make appointments or get some extra work done.
Look At Cutting Back
If your business has a lot of expenses that are not essential to your business, this is a great place to start cutting back. Cutting back on things such as eating out, free coffee, and other amenities your business may have can help save you money while in a financial crisis. This is usually one of the first actions taken by SMBs or larger corporations when cutbacks are necessary. The more money you save, the more money you have to invest in things that make your business money.
Renegotiate Contracts
In a financial crisis, you will want to take a good, hard look at where you are already spending money. If you have contracts with clients, agencies, or other services, this is the perfect time to negotiate your terms. Renegotiating contracts can lower your monthly expenses or even allow you to get more from the people that you are dealing with. This can not only save you money, but it can also save you time.
Look At Doubling Down & Expanding
If you are in a financial crisis due to an economic lull in your industry, you may not be the only business suffering. The gut reaction for any business is to pull back spending and get by with what you have to preserve profits. However, you can take the risky approach and double down on your current work. With competition at an all-time low, you can come up with creative ways to get your name or service to the public at a lower cost. This may take a little more money and time to start with but can pay exponentially in the future.
Whether you’re a salon owner or an online clothing business entrepreneur, understanding how to stay afloat during tough financial times is crucial to succeed. Check out the infographic below for a complete guide to navigating a financial crisis as an entrepreneur.
