Are You Ready for Any Lean Times Ahead?
Talking about financials and money can be scary for some people🙋♀️. And thinking about any economic downturns can be frightening to just about every business owner. But that doesn't mean we should put our heads in the sand. Solid financial planning can keep us from riding the rollercoaster of ups and downs, but you have to commit to doing it BEFORE the roller coaster starts to head down the hill. Here are 4 things to keep you ready for any lean times that could be in our future!
Watch the Indicators
You don't have to be a financial wizard or read the Financial Times every day to keep yourself informed on what lies ahead. Sign up for financial newsletters from major outlets that will give you highlights to watch out for. You can skim those and still get a great sense of what's ahead. For example, right now there are rumblings in the Chinese housing market that could create a domino effect across the globe. And there are some ripples being created with supply chain issues that may cool the push here in the US for our design market. Being prepared with information will help you form a plan to ride any waves in the economy!
Make a Plan
Speaking of a plan or strategy, it's always a good idea to map out how you would react to any dip in the economy. If you've been having an amazing year, you definitely want to be sure you save as much as you can for the future. And if you're thinking about hiring, ask yourself where you can use part-time or temporary help, rather than hiring all full-time employees. I'm not saying you should scrimp or try to run too lean, but remember that scaling down is far harder than scaling up, so be sure you're smart about how you're hiring and spending in the next few months.
For tax purposes, are there ways you can invest any profits right now? I'm not talking about in stocks, but you could look at real estate or other additions to your portfolio if you've had a good year. A good tax accountant can help you navigate how and where you should invest to avoid paying a ton of taxes in 2022. That in turn will help you bank more money next year. But be sure you are also minimizing your risk level!
Pay Down Debt
If you have any business debt (or personal debt, too!) now is the time to pay it down or to eliminate it altogether! You'll save yourself a lot of money in interest payments if you can pay off any credit cards, business loans, or other debts. And that will free up funds to keep things humming along if your business slows down.
I know it isn't any fun to plan for down times, but it's essential to keeping your doors open! To keep you from avoiding this important task, download my FREE Guide for How To Manage Analysis Paralysis! It will keep your head out of the sand and get your geared up for some serious planning!