This past year has seen unprecedented losses to the business sector. It’s particularly a hard time for independent business owners and other entrepreneurs who are struggling and are having to make some really hard decisions. This is naturally causing some serious issues with mental health and stress among business owners, as they have to close their doors indefinitely. If you fit into this category, we have some simple advice to help ease your worries and give you some options.
Financial worries and stress could be experienced by any, especially in challenging times when business has been going badly. But more specifically, when speaking about entrepreneurs and businesses, it is more than just worrying about your finances. When jobs and livelihoods are in jeopardy, it can massively increase your stress levels.
- Poor Cash Flow: This is when no money is being generated.
- High-Interest Debt: It’s fairly common for banks to be wary of the viability of your business, especially when new, which might mean you have high-interest debt.
- High Outstanding Receivables: No business is safe, and lots of people and businesses are not able to meet delivery times, and things are delayed when getting to customers, and as an entrepreneur, this is something you will notice if your business in under stress.
With so much riding on your shoulders, it’s very important to manage your work / life balance. Not neglecting your sleep, taking time to exercise, eating better, taking time to do the things you enjoy: these are all things you can do to bring some kind of equilibrium and balance.
Dealing with Financial Stress
Look at Your Budget
Look at your expenses and take an honest evaluation. See if there is any room for changes. Making the necessary adjustments could be the difference between the success and failure of your company. Fixed and variable expenses might be a good place to start, evaluate the longevity of your current model. And if you don’t have a budget already, now is a good time to start.
Consider an Emergency Fund
There’s a lot of help out there for businesses in trouble, for example, the Senate has just passed a $2 trillion rescue packages for businesses. Plenty of banks offer loans at competitive rates, discuss your options with an advisor to see if this is the best option for you. Emergency funds can help you deal with any surprise knocks to your company, or deal with any unexpected payouts that your work force might face.
Re-Assess Your Business Model
This is a difficult, yet necessary part of a restructuring after financial stress. Although it will be a difficult question to ask yourself, but will your current business model last? How does it compare against a strong business model? Evaluate your profits and costs against new sales, credit cycles, and bad debts.