Top Tips to manage a business budget in uncertain times
Words by Kimberlee Brown from Quick Brown Fox Finance
Happy New Year! This is a standard January greeting, but for some of us, this new year feels far from happy. These are crazy covid times and despite being told that it is ‘business as usual’ now that borders are open and lockdowns have been lifted, it is more like ‘business as unusual’.
Uncertain times call for a focus on the things we CAN control. Like understanding the finances of your business, no matter how good, bad or ugly they might be.
It may be daunting, but I promise you it will be empowering, and help you feel more certain about your business and the year ahead.
Here are some of my tips on how to keep control of your business budget when the world is going off the rails:
Actually have a budget!
It doesn’t have to be overly complicated but planning and tracking money coming in and money coming out provides certainty and clarity. This goes for both your professional and personal finances. You can find basic budget templates online. Unfortunately creating the budget is only half of it; you need to track your revenue and expenses and compare these to your budget. Review and revise often.
Show me the money
Have clients with outstanding invoices? If they can’t pay in full by the due date, suggest a payment plan. Receiving $20 a week from them is better than getting nothing at all. Ask if they would be happy to sign a direct debit agreement, so it is automatically taken out of their bank account. This should help alleviate some of the pressure and stress out of the transaction.
Provide an incentive for your clients to prioritise the payment of your invoice – offer a discount for invoices paid in full and on time.
Look at alternative sources of income. I definitely cringe at the word ‘pivot’, but it has its place, and here is the perfect example. Are there other services or products you can provide that are in demand right now? It doesn’t have to align or relate to your current business, nor does it have to be something you do forever.
If business is quiet, can you use that time to create an eBook or course that can provide you recurring additional income? Is there a new audience you could target? For example, you may be a photographer, but you could create a ‘cheat sheet’ on how to take the best photos for social media on your iPhone and make it available for sale to those who want great photos but couldn’t normally afford professional photography.
Reduce Recurring Expenses
The cancel culture you should participate in. When was the last time you checked your PayPal account or bank statements for recurring payments? Subscriptions, apps, memberships – do you use them, need them or even remember what they were for? Cancel where you can.
If you don’t ask, the answer is always no
Speak with the people to whom the business owes money and ask for a payment plan or extension. This goes for the tax office and the bank. It is in their best interests as well; they would rather be paid over a period than not at all.
If you do have debt, how much is it costing you? Can you renegotiate the rate? Look for current deals with interest free periods and ask your current provider to match. Or, make the move and take up the offer provided by their competitor.
Can you consolidate bank accounts, debt facilities (like credit cards), even providers? This removes the double up on fees and can allow for a discount if you use one provider for multiple services. For example, many energy providers will give a discount if you use them for both gas and electricity.
Take care of yourself
Working for yourself can be a lonely ride, especially when things are tough. Reach out to family and friends when you need. Join like-minded communities or groups online and use them as a sounding board and reminder that you aren’t the only one facing uncertainty.
Ensure you take time away from the business to clear your head and look after yourself. This makes you more productive and effective.
Surround yourself with people that lift you up and champion you. They reinforce why you do what you do and remind you that this too shall pass.
General advice and information only
Any advice and information provided in this article is general only and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice provided you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives.
If you need help getting your business budget in order, get in touch with Kimberlee today here.