Putting A Plan B In Place For When Profits Are Down
Even the best businesses out there have hard months. Such is the harsh reality of the entrepreneurial life. Sometimes, you won’t be able to blink for the amount of work coming your way. Then, there will be months when you have no choice but to send your staff home early.
These dry patches can be worrying. But, a stable business shouldn’t struggle to get past them. If you’re serious about making a go of things, you should put some effort into a plan B for periods when profits drop.
The majority of businesses find it hard to turn over a decent profit at the start of the year. Others may struggle to get going until the weather hots up. Either way, after a few years of operations, you should have some idea of when to expect dry patches. As such, you have plenty of time to prepare your plan B. If you haven’t done it yet, consider the following three options for getting started.
Start a rainy day fund
Most of us have a rainy day fund for our personal lives. But, have you ever considered your need for a business emergency fund? If you set money aside during busy times, you’ll have more than enough to cover months where jobs don’t come rolling. So, get into the habit of working out how much you can set aside once you know your profits each quarter. And, don’t be afraid to dip into that money the moment things get tight. If you fill the pot again as soon as profits soar, you shouldn’t be hesitant to use the whole lot if it helps to keep you going.
Rely on your assets
Often in the business world, we focus only on how products are selling. In the process, we forget that straight profits aren’t the only thing of value within a company. With this in mind, you have more money than you think, even if you fail to make a profit. Turn, instead, to your assets. Things such as machinery, or your business space, are likely worth a lot. And, if things get really tight, you could make use of the financial services offered by companies like Equify. Such options allow you to get a cash loan using assets as equity. And, that won’t be a problem if you know you can pay it back as soon as things pick up again.
Get innovative to increase sales
It’s a fact that, even when times are tough, customers can’t resist a bargain. And, this could work incredibly well for keeping you afloat. When times get tough, why not develop a few deals to pull the profits? Some money is better than nothing, after all. If your product is seasonally based, this could be ideal. People will be willing to buy snow shovels in the depth of summer if they can do so at half price. Make use of this to ensure that you can at least cover your operating costs during dry patches.