In business, there are few things worse (or so many potential failures) than competing for money in a short period.
So it's the wisest way to plan . We recommend the following measures.
1. Understand the seasonality of your industry
Plan for off-season and prepare enough cash for off-season that may occur. Of course, you can get a good feeling from your historical sales figures, even if there are no numbers (for example, if this is your first year in business), your pre startup research of the industry you choose should give you a basic understanding of the seasonal fluctuations.
If you haven't, look at the relevant trade magazines and talk to people in the industry to get a rough idea of the time and relative size of seasonal sales volatility.) Include this in your monthly financial plan.
2.2. Establish a risk buffer
Start or build an emergency fund for your business so you can survive a recession, sudden negative events, or even positive events in the form of unexpected demand growth. If you haven't started your business yet, but you've already gathered capital for it, incorporate the hypothetical recession into your plan to see if you've already set out enough cash to deal with it.
If you're already in business, start to set aside a part of your monthly income to create a buffer for difficult times.
Of course, how much money to save is a business judgment problem: too few, if something bad happens, buffer may be very uncomfortable; Too much, you may starve to death today's growth to prevent events that may never happen.
3. Find a financial partner and a successful plan
As an alternative (or better, as an additional measure), find a financial partner that can quickly approve and provide new capital when needed. If you are losing money and losing money, time is crucial: as your resources decrease, your business's leeway decreases, and its risk increases.
In addition, the cost of financing will increase as your business weakens (because the probability that you cannot repay the loan is increasing), so it is very valuable for a financial partner who does not impose cumbersome document requirements and waiting periods on you.
Most importantly, try to plan, including the projects you plan to complete and the funds needed to complete them. This will enable you to get funding in advance when you need it to fund your business expansion, such as, or move to a new location.
Whenever you write down a new goal, write a dollar number next to it and ask yourself“ Do I have the money or do I need to get it“ If you don't think about projects and funds in advance, you will be forced to seek financing when you need it, which is often a precursor to decision-making mistakes and unsatisfactory results.
【Source text: by report】
.jpg)