How to Reassess Your Financial Goals
Like almost every business out there, we're having to rip up the goals and financial markers we set for ourselves in January and write new ones. We were so naive at the beginning of the year, weren't we?! But seriously, no one saw this pandemic and shutdown coming, and now we need to rethink our financial plans for 2020. Most of us have taken a hit, so a reassessment is in order. But how do we rethink our goals when the future is uncertain? I have some ideas for that.
Check Your Cash Flow
Normally in business, you are focused on your income and figure you'll balance it all out at the end of the month. But now, you really need to keep your eye on your income AND your expenses. You need to know how much cash you have on hand at any given time. And you need to protect that cash. What do I mean? Well what if - gulp - things get a little worse? What if your area takes longer to recover? What if your clients start to hang onto their money rather than spending it with you? If this pandemic has taught us anything, it's that we need to be prepared. Look for ways to build up cash now so you can keep operating AND so you can bank it for the future.
Watch Your Expenses
This is the time to cut all non-strategic expenses. What are those? They are anything that does not help you make money. It could be rent on a showroom that no one can come to now, or for the foreseeable future. It could be reducing staff (painful, but it could mean life or death for your business). Whatever will keep more cash in your pocket is the key right now. To help you decide if something is essential or not, think about how cutting that expense would impact your business. If you can still provide stellar service, then cut away!
Take a Look at Vendors & Clients
This is REALLY important - you need to look at your list of vendors and clients and try to head off trouble before it happens. What do I mean by that? Get in touch with vendors to understand exactly how they are operating right now. Many vendors have had serious supply line disruptions and/or financial issues. You don't want to be caught by an unexpected bankruptcy, a long delay in shipping, or any other issues you weren't expecting.
Be prepared to stay in touch WAAY more than you normally would. And with clients, this is the time to be sure you are following best practices as far as payment and billing. Bill upfront for at least a portion (ideally ALL) of your design fees. Do NOT pay for products unless the client has given you the money for the order. Bill for every single hour you work - you earned it! This is not the time to act like you're doing your clients a favor. You need that cash in hand. If you aren't being paid, you don't do the work.
You can see a theme here. You can adjust your goals from a specific number you'd like to make at the end of the year to what you need to do to keep your company afloat - and thriving! The key to that is know your financials backwards and forwards, and to look at them every single day. This is the time to be on top of your cash flow and expenses like NEVER before.
I want to help! First, download my FREE Business Goal Review to help you reset where you are now and where you want to be in December.