Entrepreneurs are typically familiar with a degree of uncertainty when it comes to launching and managing their business, but COVID-19 has delivered even more unknowns.
We’re operating in a risky business climate that has led some companies to close their doors indefinitely or cut back on staff, while others transition to working from home as they grapple with an uncertain future.
While it’s true that stressful times make running a business even more challenging—especially while juggling financial obligations and overhead. Yet there are actionable steps business owners can take to weather the storm and remain strong and resilient.
Below are a few tips from Alan Safahi, Board Advisor and 6X serial entrepreneur, to manage financial stressors in a time of overwhelming uncertainty.
Pre-evaluate your business plan
Before starting any venture, be prepared to put in the time to make a detailed business plan. This is the foundation of your business, so the time and effort you put into it from the start, the more solid your foundation will be.
A business plan guides you through the different stages of turning a concept into a viable business, and in uncertain times, it can act as a reference point to keep you on track, strategically and financially.
Financial projections usually get pushed to the back of a business plan, but they’re incredibly valuable and important. Take the time to think through the cost of running your business, your overhead and how your projections will look in the next year.
Know your numbers
It goes without saying that you should prioritize understanding your company’s financials. “Document all your expenses and maintain good records to track cash flow, expenditures and outgoing payments” – says Alan Safahi Advisor & Board Member at Safahi Global Advisors.
“Doing so will give you greater clarity when assessing your financial position, and perhaps even some peace of mind”.
Streamline as much as possible
In recent times, we’ve seen many companies look for ways in which they can cut back on costs to keep the business afloat. Can you make do without an office space for the rest of the year? Are you able to cut down on advertising to keep expenses down? When you take a closer look at your business and its expenses, you’ll likely find a few opportunities to trim your spending.
Set aside for a rainy day
It’s not too late to start saving for a rainy day because businesses are usually cyclical and cash is like an oxygen needed during rough times to sustain the business.
Use your creativity
Entrepreneurs are accustomed to rolling with the punches, global pandemic or otherwise. If you’ve been thinking of a new approach, wondering when might be a good time to pivot or introduce new offerings, now may be the time. That may sound counterintuitive (shouldn’t I be looking for ways to reduce risk?), but if you’re looking for new ways to swim – rather than sink – it….
Seek support when you need it
Entrepreneurs and business owners usually carry the stress of running a business with them and are often too concerned with keeping the lights on to check in on themselves. If you’re feeling overwhelmed, it’s important you find support. Seek out the advice of an accountant, financial advisor, coach or even other entrepreneurs who understand the position you’re in. There are a number of resources available to business owners, it’s a matter of sifting through to find what’s relevant for your business and needs.
While these are unprecedented times for entrepreneurs, Alan Safahi encourages founders and business owners to take a step back and see where there might be opportunities to reduce risk and find financial stability.