How to Keep Your Business Afloat During Difficult Times
by Northern Life
HERE’S WHAT YOU CAN DO TO KEEP YOUR BUSINESS AFLOAT AND GET THROUGH DIFFICULT TIMES.
Let’s be honest that every business is going to struggle at some point. There’s always going to be a time where things don’t go smoothly or as planned. At times, you might even fail. But does that mean it should discourage you? Not at all. If anything, this is a blessing in disguise. This is a time where you get to sit down and assess your business in its entirety.
Check On Your Employees
Your employees are one of the most important aspects of any business. Like you, they carry the fate of the company on their shoulders as well, so it’s important to make sure they’re doing alright. If your company isn’t doing well financially, it might be difficult to budget out money for their paychecks. Another scenario involves job satisfaction. Job satisfaction is something every employee wants to have. However, it’s possible that some may be unsatisfied with how things are handled. A great way around this is to alert every employee you have of the current situation. If there’s a shortage of profits, tell them so they can properly budget for the month.
See How You Can Innovate Your Business
One of the reasons a company can start to decline is because its way of doing things is outdated. Outdated business practices can ultimately destroy a business if they’re used for too long. Granted, it’s understandable that finding new ways to be innovative can be a bit challenging. However, innovation can mean many things ranging from offering better job flexibility, to investing into more modern equipment. If you’re a company that utilizes a fleet, but something isn’t going right, there are ways for you to innovate.
To start, you can use fleet telematics as a solution for vehicle management. Fleet telematics are when you cross reference the data from the internal behavior of a vehicle with the data compiled from various technologies. This technology includes GPS tracking systems and ELDs, which records information from the vehicle’s onboard diagnostics module (OBD). This method can go beyond GPS tracking systems and lead to more effective fleet management.
Go Over Your Current Financial Situation
The company’s finances are probably the most important aspect you need to have a good grasp of. To better understand how your business is doing financially, you’ll have to create a comprehensive budget. Below is everything you need to factor into your budget:
- Estimated revenue
- Monthly expenses
- Current cash flow
- Variable costs
- How much you made from sales
What’s listed here is actually a part of something known as a master budget. A master budget, in business terms, is basically when you go over everything. Granted, creating a master budget from scratch can take a considerable amount of time. A great way to break it up is to create a static budget, operating budget, and cash-flow budget. A static budget primarily goes over any fixed expenses, which can be a lease or your employee’s paycheck for example. An operating budget is when you write down the variable expenses as well as the revenue obtained from business operations. Variable expenses are unpredictable payments, which can include loan payments, equipment costs and even renovations.
A great way to break it up is to create a static budget, operating budget, and cash-flow budget.
Aside from the master budget, a cash flow budget is probably the trickiest one to craft, especially for newer business owners. To keep things simple, a cash flow budget is how you can keep tabs on the timing of your current income and expenses. It’s how you make sure you’ll have enough to pay off the expenses in a timely manner. It’s recommended that you create the other two first before this one.
Remain Calm and Focused
Despite the potential severity of the situation, it pays to keep yourself calm and collected. Panicking and constantly fixating on the worst-case scenario is just going to cause more problems. Focusing on one thing at a time can make it much easier to come up with an appropriate solution. If you notice that you’ve noticed an unusual fluctuation in the inventory costs, you’ll need to carefully go over the process. See if anything is out of place or if someone on the management team accidentally ordered too much. Once you’ve determined the cause, you can see how you can ensure the same mistake never happens again.