The sign of a great entrepreneur is one that knows how to manage a business during turbulent times. It is in these periods that the tough decisions must be made, entrepreneurial spirit comes to life and leadership is demonstrated. This is something that many businesses have been going through in recent times as a result of COVID-19, which has led many previously successful businesses to close and file for bankruptcy. So, what are a few financial tips for managing during turbulent periods? There are a few tips that any entrepreneur will benefit from knowing and will hopefully help you to step up, manage and come out the other side.
Rebalance Your Portfolio
Asset classes stray from their targeted percentages over time. By rebalancing your portfolio, you will shift money from over-performed asset classes to those not performing as well. This ensures that your portfolio allocation follows its intended design while maintaining a continual level of risk. Though it may be repetitive, you should rebalance your portfolio annually.
Ensure Business Continuity
Though clients and customers may be panicked, you should be focused on building business continuity and disaster planning. Collaborate within your business to share services and reduce inventory. Of course, communicate with your stakeholders as automatic actions come from being alert. Furthermore, whether it COVID-19 or not, you need to manage employee compliance.
Use Emergency Funds
Business owners should always have some money set aside to use in an emergency and know when the right time to use it is. During COVID-19, many entrepreneurs were reluctant to tuck into their emergency fund, but if you do not use it in a pandemic, then when will it be used? It is never a great feeling using emergency funds, but sometimes it is the right thing to do.
Slash Your Costs
Instead of filing for small business bankruptcy, you also need to spend some time going through every regular expense that the business has. Until the difficult period has passed, you should be frugal. Slash your costs as much as possible to free up cash. Be careful with doing this, though, as you should not make any changes that could do long-term damage to the business.
Speak With Your Suppliers
During difficult times, honesty is the best policy and you will find it helpful to speak with suppliers to let them know the situation. If you have a good relationship, they may be willing to change payment terms or defer payments until the situation has improved. Situations like this can often strengthen client relationships, so it is always worth communicating with your suppliers.
Look Into Funding Options
If your business is struggling to make ends meet, it is worth exploring your options in terms of funding. A business line of credit is always helpful for difficult periods or you could look into other types of loans for business, investors or crowdfunding as a way to get back on your feet. Finding external financing is often the easiest way to manage during a difficult period and it is something that many businesses have to do (especially during the pandemic).
Use A Personal Loan If Needed
If your business is suffering, you may also be struggling in your personal life and this can become a vicious cycle. If you need it, taking out a personal loan can be smart and help to alleviate your financial concerns at home so that you can really focus on the business and leading through the challenging period. Places like OneMain Financial make it quick and easy to arrange a personal loan to take control of your personal finances (for personal, family, or household purposes only).
Managing a business through a turbulent period is never easy. Of course, you should be frugal, slash your costs, and explore different funding options. Hopefully these financial tips will prove to be useful and help you to come out the other side.