The COVID19 pandemic has affected lives and economies at an astonishing pace.
Although experts predict an unprecedented economic recession, challenging times should be no more than opportunities for small business owners.
With this goal, making a strategy should be a natural response to events. From creating an emergency support fund to hiring employees and get the help you need, all options should be considered. This includes the federal low-interest loan, although it can be hard to repay. Crisis management requires staying focused as a vital step. This will allow you to make objective decisions and fill yourself and your team with confidence.
The ultimate goal when owning a small business is achieving financial independence. This is when you will start to feel that this is truly your business and that you are on the path to success.
In order to get there, it’s necessary for you to overcome obstacles and adjust the way in which you see things and change your perspective. Here are eight instrumental steps to get the financial freedom you have been looking for in your small business.
The Hard Thing: Making a Decision
The decision to start saving money to attain financial freedom should be a no return point as a small business owner. Every risk and measure taken to achieve that goal shall be executed with effort and determination. You might have to apply for an online payday loan – or business cash advance which is a form of short term financing used to help with a company’s immediate financing needs. A small business can usually apply and get a preapproval within an hour or two by providing a minimal amount of personal and business financial documentation. A small business payday loan can then be funded very quickly, with the money deposited into your company’s account within days, if not the same day.
It is crucial to not get carried away by external influences because these sacrifices are not easy to do, and not everybody is up to it. It would be like adapting to a fitness nutritional lifestyle.
The first few steps are small changes in your daily meals and later on, the necessary strategies will come naturally.
Know your resources
A vital thing is the acknowledgment of yourself and your business. All the info you can gather will help you know best what are your strengths and weaknesses for this process.
Taxes and investment sheets, financial balances, insurance outcomes and covering, and other business documents will help you develop a plan that suits you according to your expenses and incomes. This is how those adjustments become truly effective.
Back to basics: Make plans!
You must set your goals and objectives in a way that these can be met. Your financial business goals -and the way to achieve them- should be as clear as water is.
Establishing savings accounts and investments should be the number one priority. Moreover, take everything (profits, expenses, clients and employee’s satisfaction, pricing of your product or services) into consideration while planning.
Smart decisions require preparation. For a goal to be achieved, small goals need to be reached first! Fill all the gaps along the way.
Build Up Your Savings
Despite experts recommending to keep minimal insurance cover (to lower the business expenses rate), the truth is that it is wise to constantly review your coverage to protect all of your assets.
Another good way to keep long-term savings is through retirement plans. If you don’t have full-time employees, a solo 401k plan could be a great start.
However, if your small business doesn’t qualify for a solo 401k, a Simple IRA will do the job.
Retirement plans have also a great plus; they are the best way to shield your business income from excessive taxes.
If feeling unsure while choosing a retirement plan –or if you don’t understand their implications- hire an insurance agent and get professional advice.
Control of Inputs and Outputs
Don’t just wait for something to happen to start saving. Whether you are waiting on market growth or buying resources for your business, if in your current situation you handle a tight budget, try to find a way to raise your income.
Marketing experts convinced us of the necessity of having “good debt”. However, there isn’t such a thing. Financial independence implies you don’t owe anything, to anyone, independently of if it is for a good reason. Try to pay-off debts as soon as possible.
Do not focus on a single action; it should be a whole system in motion. Analyze your expenses pattern and control unnecessary spending. Determine which investments are better for your business, find new clients, avoid problematic clients and employees, and renew your sales plans.
Design a whole plan for managing your small business with the lowest expenses rate possible and a high income.
Make sure your career is on its path to success. As Benjamin Franklin said, “An investment in knowledge pays the best interest”. You should become knowledgeable about financial matters so that you can invest in yourself and see the fruits of your effort.
Eventually, your income will increase because you’ll diversify how you make money. Gaining more and maintaining a low expenses rate will take you closer to the main goal.
Master this Lifestyle
Set up a system, a way you and your business can run with a monthly or weekly budget. Continuously refocus your goal and keep track of your accomplishments, and above all, build attainable goals.
Invest, Invest, Invest!
Smart investing creates second, third, and infinite sources of additional financial income. It is risky because of market fluctuations, but it is important to invest despite what other businesses might be doing.
If the market feels unstable, reduce your investments in equities and diversify across several types of investments like stocks, cash, and real state. This is a great way to protect yourself from unexpected loss