Smart Money - Prepare your Business for the looming recession

SMART MONEY BY TAKISHA ARTIS

HOW TO MAKE STRATEGIC MOVES WITH YOUR MONEY

When it comes to running a business, you have to know a little bit about a lot of things. Trends in your industry, customer concerns, products, and service development; the list just goes on and on. But one of the main areas most entrepreneurs bury their heads in the sand is with their finances. I totally understand, its probably the same in their personal finances.

With an economic storm looming in the form of a recession in 2020, it’s time to make sure your finances are in order, and you are positioning your business to bring in an abundance of cash. With the growing number of entrepreneurs surpassing the six-figure mark in earnings, it’s vital that you are more intentional in your spending, savings, investing and giving.

Here are three ways to be more intentional with your finances.

Smart investments.

Identify areas within your business where you can invest in generating massive growth such as systems, personal and professional development, and marketing.

This may also be the time to start outsourcing certain areas so that you can free up your time. Engage someone to help you in the areas you are weak or hire a coach to help you scale your business faster. While you’re investing, don’t forget to build a business reserve. This will help ensure that you, keep your cash flowing when sales are low, are prepared for upgrades, or in this case, provide a cushion to hold you over during a recession.

HOW MUCH SHOULD YOU HAVE IN RESERVES?

Your reserve should include the costs to run your business and the cost to pay yourself for at least three months; however, six-nine months is ideal. The payment to yourself can be in the form of your salary or withdrawals. To fund this reserve, set up an automatic deposit just like you would with your personal savings account.

Be prepared to diversify your offers and prices. When your clients no longer have the same amount of disposable income, you have to make sure you still have something that they need at their new price level. This could be as simple as creating products and/or services at different price tiers. Being able to adapt to your clients’ needs at various price points may be the determining factor in them staying with you as a loyal customer or going elsewhere.

Give your profits purpose. Your primary focus in business is to generate more income, but you also need to focus on lowering your expenses if you want to make a profit. If this is an area that you have been putting off, I urge you to make this a priority.

Be intentional when it comes to the best use of your funds. If there is excess revenue (all expenses are paid, reserves are fully funded, and you are taking a salary) consider giving yourself a bonus so that you can pay down your personal debt and increase your personal savings. This way, you and your business will be prepared for a possible downturn.

WHERE CAN I CUT COSTS?

The best way to cut cost is to start by reviewing your expenses line by line to see if each item is still serving your business. Ask yourself, am I still using it (i.e., software, water services, subscriptions, etc.) and is it still beneficial? If you’re not using it, cancel immediately.

Congrats, you have started saving some money already. If the “stuff” is no longer serving its purpose well, you should consider finding another option. Hopefully, one that yields you some savings. If you haven’t used it in the last 30 days, you either need to use it or cancel it. Don’t think of the money you saved by canceling stuff as “free” money; it should be first allocated to your reserves and then investments, especially since you are already accustomed to the expenditures. immediately. If it's not serving you find another option or cancel. If you haven't used it in the last 30 you either need to use it or cancel. The money that you canceled, the next month add them to your reserves since you're already used to paying for them.

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SIDE NOTE: MONEY BLOCKS

A Money Block is a belief, thought pattern, or story that stops you from being able to make, save, spend, and manage money.

[1] You Can’t Have it ALL - Uncomfortable with receiving money.

[2] You Have to Settle – Free or discounted prices when you know they’re worth more.

[3] Comparison - There’s someone already doing it. I can’t make what she does, feeling like a fraud or unqualified.

[4] Excuses - People won’t pay my prices, my family doesn’t support my business, I don’t know how, or I have so many ideas.

[5] Believing the Worst - You’re always waiting for the worst so you never enjoy what you have, you can’t make more or have more.

[6] Surrounding Yourself with Negative - People or those with a poverty mindset. They complain about money constantly.

[7] Believing you don’t deserve Money - Uncomfortable with extra money or spending it when you get to a certain amount.

[8] Fear of Failure - You do a little or talk yourself out of things because you’re scared to give it your all.

[9] Fear of Success - You start gaining traction but the moment it gets good you stop or slow down.