Small business owners have to wear many different hats to keep things running smoothly. From start-up costs to seasonal slowdowns, small contractors need to plan everything, including contingencies. Here are 10 things that every small business owner should do to plan for the unexpected.
How to Prepare for the Unexpected in Business
Do not put all your eggs in one basket
"The problem is better expressed by the old adage" do not put all your eggs in one basket, "says Jay Ferrans, president of JM Financial & Accounting Services in Southfield, Michigan." If you have one or two customers important, trust me, they can and disappear. This can cause a business owner to shut down. It is essential to add customers, regardless of the degree of security of a customer. "
Establishing an Emergency Fund
Even if you have a good customer base, an unexpected downturn in the general economy or a particularly pronounced seasonal decline in sales can reduce or eliminate your paycheck as a homeowner. ;business. The best way to support your business against these types of unexpected slowdowns can be an emergency fund that covers the expenses of 6 to 12 months for you and your family.
Research Materials and Other Costs
"Start-up costs for things like equipment, construction, and payroll are an unexpected challenge for new businesses," says Mike Windle, Retirement Planning Specialist at C. Curtis Financial. Group in Plymouth, Michigan. "One big mistake I see often is a new business owner grossly underestimating how much they will need to sink into their business before they start making profits."
Taking the time to write a good business plan will include the necessary elements and costs, such as remodeling, hiring staff, and inventory. These are things you could miss without this document.
S & # 39; adapt to the changing needs of customers
A successful business stays on top of the needs and desires of customers. It means being aware of the latest technologies and how rising generations are focusing on different things. A sales campaign that works one day might not be the next. Having a good presence on social media and someone to monitor it will help you adapt to changes.
Adopting a balance between work and home life
Some business owners are surprised at the cost of running a business for their family. Adopting a work-life balance and making time for people at home will make both aspects of your life stronger.
Schedule a business cycle and when you will be paid by customers may be a shitty shoot. Extreme weather is just one of the factors that come into play.
"It's important to know how much time you need between spending money and getting money from your client to keep the cash flow right," says Windle.
Business loans and lines of credit are just two possible options.
Paying taxes on time
If you are not careful, small business taxes can cause money and stress problems. Many small businesses like individual businesses are responsible for keeping tax money aside. Remember that owning a business can also change personal taxes.
It is best to pay the total amount when it is to avoid trouble.
Keep up to date with the evolution of laws and regulations
If you do not stay abreast of regulatory developments in your state and even at the federal level, they can blind your small business. A good example is the burgeoning opportunities in the marijuana industry in places like California, where getting around a local prescription can actually mean breaking the law.
A good team of trusted advisors here should include someone who can handle legal issues.
"Owning a business will be the only chance for most people to really have the wealth that they desire, but you have to go with the proper expectations about time, money and at the job it will take to start a business and keep it successful, "says Windle.
This means that small business owners must set realistic goals for the time needed to turn a profit taking into account the work-life balance and funding factors.
Kissing the Risk
Running a small business is not as safe as getting a paycheck. Welcoming the risk, it is planning drought periods, wobbly cash flows and understanding how to make the most of the uncertainty.
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