What's Your Money Plan for Emergencies?
When you imagine the money situations that could arise in your business, it can feel overwhelming. Sometimes, it’s downright scary to address those potential blind spots and to prepare yourself for them.
That’s why you need a money plan for business emergencies!
So, what are some of the things that qualify as a business emergency?
Let’s say you suddenly lost the use of some revenue-generating equipment, or you unexpectedly acquired a new contract that requires you to hire a new employee or order more materials than usual, or you need to retain a lawyer. Those are just a few types of business emergencies.
What an emergency is not - attending a last-minute conference, buying a new piece of equipment, purchasing a course, or hiring a coach. Those are all expenses you should plan for, save, or spend from regular operations.
Here’s the thing… Emergencies are inevitable.
But, they don’t have to devastate your plans or be so catastrophic that they cause you to end your business.
You just need a plan.
So, where should you start?
1. Start with a budget.
Look over your current revenue and expenses, and really determine how much money you can save each month. Then, stick to it.
2. You need a designated emergency fund.
Create a new bank account just for business emergencies, and add to it consistently. It will keep your emergency fund out of sight and out of mind, which makes you less likely to tap into it for everyday expenses.
3. Lower your commitments.
Another way to help yourself navigate an emergency is to pay down any debt you currently have. Without debt payments, you’ll have more cash available to take care of an emergency, should one arise, without detailing your plans.
Once you begin paying yourself a salary or bringing on employees, you want to ensure you can continue consistently. By not having to worry about the what-if’s in your business, you can focus on the everyday operations with confidence.