Welcome to Day 4 of 30 Days To Your Financial Freedom Challenge!
As a business owner, it can sometimes be confusing figuring out where to cut expenses and where to find additional income streams. However, the first issue comes with knowing how to choose what is important during a financial crisis and what can wait. It can be hard distinguishing between needs and wants, and this is especially true when it comes to running your business. Let’s dive right in with some quick tips for the areas you need to be looking at!
Cutting Spending
The awesome thing about running a business from home online is that you can run extremely lean. Most software available today can expand and contract so that it meets the needs you have today. Don’t hesitate to speak to any software company you pay a monthly fee to about potentially cutting your bill.
It can be tricky to distinguish between an expense and an investment when it comes to business. After all, advertising is a taxable expense in the books, but it’s also an investment that helps you survive. Many small business owners make the tragic mistake of stopping their investments in advertising when money is tight, causing a horrible chain reaction leading to even less income.
Therefore, you’ll need to use the knowledge you have about your household, as well as your business, to know what is most important during your financial crisis. How do you make your income now? If you run ads offering a return on investment of any kind, you should not stop them. If your ads don’t show a return on investment, then you can cancel them.
Pay Off Debt
Paying down debt as soon as you can is also another way to keep your business lean. Avoid borrowing money, but if you borrow it, pay it off as soon as you can instead of keeping the loan for the allowed time frame. That way, if you need to borrow money during hard times, you’ll have a good record.
The other thing that people often do when they shouldn’t is to concern themselves more with paying unsecured consumer debt during a crisis than they do their basic living expenses. Instead, if you add up your income and expenses and you cannot pay for more than your basic living expenses, such as shelter, you’ll need to skip the consumer debt payments instead.
Choosing What’s Essential
Sometimes deciding what is essential and what is not essential is a tossup, and very personal, but always focus your income on the things that keep you sheltered, fed, clothed, and healthy first over the rest – even if it means you may have to file bankruptcy later. Chances are keeping yourself sheltered, fed, and healthy will also enable you to rise as the financial crunch eases, and you’ll be able to catch up faster than if you had to start all over with a place to live.
In business, it’s easy to get side-tracked and get into debt. You always think you need more or are paying for services that are just too expensive. Worse yet you get conned into thinking expensive course or even mentorship will get you on track. While that may work for some niche businesses what you really need a a business plan. Where you have a complete rundown top to bottom of your business so that you know where you are at financially and your growth potentional. You can’t go far in business if you don’t know what your money goals are. Check out the Fun Business Budgeting Workbook and learn how to get on track with your business goals.
I know that you have some hard decisions ahead but taking the time to plan out your business goals will help you survive a fianancial crisis. What has been your biggest financial struggle? Please leave any comment or questions below!
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