Are you concerned about how to keep your business afloat or grow financially in these uncertain times?
If your answer to the question is a ‘YES,’ then read this blog post till the end to know how you can keep your business afloat or grow financially during these uncertain times.
With the uncertain times of 2020, many business owners are (rightfully though) concerned about how long their cash will last, with many clients canceling the projects and no revenue coming in from the business.
Being an entrepreneur myself who helps other entrepreneurs grow financially, I have curated a 6 step action plan for you to follow to get the consistent revenue coming in and keep your business afloat.
1. Managing your cash flows
Managing cash flow is the most important step of the action plan, which will help you plan your finances and manage them effectively with the already existing money and the amount expected to be deposited in your bank account.
- Know where you stand, which means taking stock of the actual money available with you in the form of cash or bank balance and add to it the amount you can reasonably expect to come in and when it will arrive.
- Next, determine the payments to be done in the coming months. Are there any bills that can be split into installments or delayed? If yes, then do so.
- Now, make a list of items or bills you have to pay in cash (Eg: salaries). This will be eating up your cash reserves.
- Depending on the other important expenses that need to be done, Determine how much credit is available with you across your credit cards, bank loans, etc.
TIP: If you’re short on credit, then see if you can increase your credit on the credit card or lines of credit available with your bank.
- The most crucial step in managing the finances is eliminating all the unnecessary expenses until the uncertain times have passed and you safely resume back to the business game as usual.
2. Go through your books
If you maintain books for your business, then run your books to see your income/expenses, profits/loss, assets/liabilities, etc. If you have not maintained books, I highly recommend that you utilize this time to get things in order.
TIP: Use excel or google sheets to create a budget for you. Check your bank statements for some help in budgeting as they will have all your money details in them.
3. Do the spending audit
When you run your PNL report, check the top 5 expenses you incurred last year and analyze which expenses can be cut down and how you can save some money in the coming months.
4. Do your income audits
The questions below will help you to do a clear income audit. Answer them properly and you will have your income statement ready.
- What are the various products you are selling in your business?
- Identify the income for each category of products/services you offer.
- What are the gross profits for each category of income?
5. Work on new products
You may ask,
Sonia, we are looking to keep our business afloat during uncertain times and you’re asking us to work on new products? new products mean investments, and we have limited resources! How can I do this?
Worry not, you can launch new products with less or zero investments as well. Just ask yourself if you:
Can you create a new offering for your business?
Can you offer any complimentary online services/products related to other products that you offer?
For example, you can do mini-tutorials, 1:1 consultation calls, workshops, etc.
6. Connect with your clients
It’s perfectly normal not to want to sell your products in times of crisis because you think people won’t buy your products/services but, these are the times to network and create genuine connections with people. These are the times to stay connected and create a bonding with your clients. Do your best in offering value even if you are not getting paid for it, as it is the best way to generate leads for your business, which can be converted in the future.