Chances are your business will face some financial rough patches at some point. Work can slow down or dry up for any number of reasons, but some of the most common include:
Planning ahead will help you get through those times. They may still be tough, but they won’t be enough to shut you down.
Here are some strategies to consider to help disaster-proof your business:
One way to hedge against lean times is to open a business credit card. While you don’t want to rely on it for all of your expenses, it can be a useful resource as long as you go into it with your eyes open.
|Flexibility when you’re having cash flow issues||High interest rates|
|Build your business’s credit history||Potentially high annual fees|
|Earn cashback rewards||Can be difficult to pay off if business doesn’t pick up quickly|
Your business’s creditworthiness depends on a number of factors, including how long you’ve been operating and your personal credit history. But opening a business card can help you establish a record of on-time payments.
Sometimes your circumstances change quickly. The COVID-19 pandemic and subsequent stay-at-home orders happened so fast that businesses had very little time to figure out how they were going to pivot or bring their services online.
While coronavirus was unprecedented, it helps to think about how you would react to a similar disruption. Would you have enough savings to cover a few lean months? Could you afford digital conferencing services so that you could continue providing services to customers? It helps to think about contingency plans before you ever need them.