Going into business is not an easy option. There are many hurdles along the way, from the initial set up to once you have established yourselves within your specific sector. Unexpected expenses tend to crop up every now and then, but they are surmountable if you act sensibly. Continue reading for seven top tips on how you can cope when this happens.
1. Ensure you have an emergency fund
At home, you are likely to have a rainy day fund of some sort. You can have something similar in the way of an emergency fund for your business. This is simply money set to one side for use in the event of an unexpected expense. Of course, it can be tricky to have a build-up to something like this if you are relatively new. Consider putting aside a set amount each month; it will soon add up. You could do this by automatically transferring the money that comes in from a certain source into a separate account each month. Alternatively, you could assess the profit you make during a certain period and set aside a specific percentage.
2. Seek tax debt relief
Paying taxes is essential but understandably frustrating. When your financial circumstances are really tricky, forking out for a mighty tax bill can seem unfair and unnecessary, though the worry about not paying can be overwhelming. Although the IRS does not openly advocate or discuss tax debt relief, it may be something that you could consider if money is really that tight. To take advantage of a scheme that reduces your tax bill, it is vital that you seek out the services of a reputable company as there are always people out there willing to scam you out of every remaining cent in your bank account.
3. Cut some crucial corners
When we talk about cutting corners, we certainly do not advocate lowering the quality of the products or services you offer, nor do we advise reducing the safety precautions in place for your staff and members of the public who may visit your workplace. Cutting some crucial corners could mean that you remove some of the luxuries from the way in which you work. For example, would it hurt to wash your own windows or do some of your own cleanings for a little while? Could you undertake your own social media campaigns? Of course, there are always areas that could be toned down, but these usually cause issues for other people. However, at the end of the day, you have to weigh up the pros and cons of your business. If your unexpected expenses are that much of a problem, you may end up with nothing left to rescue at the end if you do not cut some corners early on.
4. Increase workload
If you can, even just for a few weeks, increasing the amount of work you undertake can help you get out of a hole. Of course, this will only work if the financial problem is fairly small and if you can physically and emotionally endure it. It is vital not to burn yourself out as this will only add to your problems and cause you further distress. You should also take into account that you might only be able to increase your workload if demand allows, so assess the situation fully soon.
5. Consider shrinkage
Although this isn’t something you can do after unexpected expenses, it is certainly something you should do to help make the most of your money. Shrinkage is something that every business faces in one way or another. For example, items or services could be lost due to being stolen or errors caused by employees. Taking this into account will mean that you do not overestimate the amount of profit you are making.
6. Find out your options
When it comes to unexpected expenses, we can often be so overwhelmed by the actual outstanding figure that we fail to consider any other options aside from paying off the amount in full. It is worth having that conversation with the people expecting your money. Some people will accept payment by installments, so that is certainly a consideration.
7. Seek professional help
If things are really that tough, financially, within your business, then you should consider seeking help from a professional independent financial advisor. They will be able to assess the situation impartially and offer a range of potential solutions. Being independent means that the things they advise should be genuinely helpful.
