Surely no one could have predicted a worldwide pandemic, and yet this is precisely what we're experiencing, what we're continuing to experience. As such, businesses need to be of an evolving mindset; that is to say, they need to be prepared should something like this happen again. How events unfolded helped create a preliminary blueprint for how to handle the situation next time, but now, more than ever, small business owners need to put into place protocol and practices that will help them stay afloat should the country encounter another crisis.
One of the things experts urge: be aware of not only all of your business finances but have a firm grasp on where your finances stand as well. A mistake that many owners make is to invest too much of their money into the business and thus leave themselves without any sort of reserve fund. The problem then becomes, especially if something major arises, you are not equipped to take care of your life circumstances and as a business leader this can put you at a significant disadvantage. Below are a few things that small business owners need to think about in the days and weeks to come, things that can help your small business survive the current crisis and any future trials that may arise.
Carefully Weigh Benefits
Many business owners, of course, want to offer employee benefits. Beyond simply a 401k and insurance, several other such benefits can be used to attract talent. However, keep in mind these costs can add up, quickly. If in the early stages of your company, you offer more benefits than the business can sustain, this is going to put you at an immediate disadvantage. Take it slow. Get your legs under you and then start to broaden what you can provide by way of benefits. And as always, don't lose sight of your situation when it comes to benefits and what you need to continue to do your job effectively.
Learning to Save Money
You created your business; it is in many ways your baby. You spend hours nurturing it, watching it grow and so you tend to pour your money into it to keep it going strong. The question thus becomes when you're ready to retire or step down, do you have any funds off of which to live? Many small business owners fail to adequately succession plan and they also fail to build up a sufficient retirement. In fact, in many cases, all too frequently, a former business owner is left only with debt entering their retirement years. Start thinking about the future now. Look into 401k plans and IRAs. Ensure that you have cash available for yourself and your family so that you can enjoy the next chapter.
Taking the Next Step
If nothing else, we've all learned how quickly the economy can turn. If you aren't ready both personally and in terms of your business finances, you could be in for some major hurdles. Plan now. Look at all aspects of your finances now. At First Union Lending we are here to answer your questions and help you plan for the future of your small business. Call today!