1. Review your finances: Start with a simple financial review. It’s worth analysing and quantifying your monthly expenses compared to any expected revenues coming in. Processes should be amended to ensure you have sufficient balances in light of the current situation.
2. Slash costs wherever possible: After examining your finances, determine which costs are fixed and which ones are variable. This will give you an idea of where you can cut back. In cases where there is a possibility of cashflow slowing down or pending payments being extended, reach out to your banks or financial partners to seek options for support now. You should be proactive as it is better to have a difficult conversation now than leaving it for later. In cases of loans or debt, it’s also worth exploring if a re-structuring of debts or a re-evaluation is possible.
3. Take advantage of shared resources: It may be the case that you know of businesses in the same sector as you. They could have production facilities or specialist skills which are be under-used through lack of business. Arrange to work together and share resources, splitting income and profits. This can dramatically reduce costs.
4. Re-finance assets: If your business has property or other assets that can be re-financed, speak to your financial advisor to check if these can be used to infuse valuable capital into your business.
5. Re-consider new investments: Given current economic climate, ensure that any new investments being made are wise and not based on market speculations.
6. Create an Emergency Budget: The best way to avoid a financial emergency is to prepare an emergency budget. Applying Mint’s 50/30/20 rule can help guide you in the right direction to construct your emergency fund. Find out where your money is going and when your payments are coming in so you can maintain a positive balance. Take it a step further by following their step-by-step emergency budget guide to learn how to assess your current budget, divide expenses, adjust budgets, find available benefits, and reassess financial goals.
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