The Effect that Life Changes Have on Your Company Finances
In business, everything you do is like throwing a pebble into a lake, which then sends ripples far and wide. Even changes in your personal life can have an effect on your company finances.
Things are always changing, but that doesn’t make those changes any easier to deal with. For example, life changes can have a negative effect on your company finances. How you manage and come through them is what can make or break your business.
Life Changes that Can Have an Effect on Your Company Finances
Any kind of distraction, whether good or bad, can have an effect on your business. Simple things like purchasing a new home or taking some time off for yourself become less simple when you see their effect on your small business finances. In addition, they can temporarily steal your focus and cause a disruption. However, when those changes are major life events, they may actually bring about a significant lose to your business if you don’t make the proper plans ahead of time.
Starting a Family
Whether getting married or having a child, this can have a substantial impact on your immediate business funding. In addition to being a cause for celebration, there are also dozens of decisions you will need to make right away. How can you protect your business? In what ways should you provide for your child?
No one likes being sick. However, for an entrepreneur, there can be serious consequences. Depending on how long you are under the weather or how grave your illness, it can be catastrophic for your company finances. The stress alone can lead to continuous failing health and more business troubles. There are many people who rely on you and the decisions you make each day. When you can’t do that, there is the potential for everyone to feel the effects.
Your spouse loses their job
Sometimes, even without having a direct connection to your company, your spouse can have an influence on your business. One example is when he or she loses their own job. This means all your personal and business expenses will fall onto your shoulders, at least for a while.
Emergency or disaster
Your child suffers an injury while playing sports. There is a robbery at your home or business. A quick-moving storm damages your home or commercial property. Surprising and sudden events can happen at any time.
Separation or divorce from your spouse
The end of a relationship is often upsetting. This can be especially traumatic if your partner has a stake or any type of control in the business.
It’s probably not something you think about too often, but you, an employee or a family member can get in trouble with the law. Legal troubles can happen in a variety of ways, such as a car accident where someone dies, a customs mistake while traveling or just being in the wrong place at the wrong time. When they do, there will be attorney fees, missing work because of court dates and worry over the outcome. That’s not to mention the damage to your personal and professional reputation due to negative publicity.
A death in either your personal or business life
Losing a loved one can rock your whole world. It sends you on an emotional roller coaster that can take months or years to get off. While that’s going on, you may be unable to focus on your company finances the way you should.
On the contrary, if the person left you money, this can also affect your finances. You might be in the enviable position of having to decide how or if to use your new wealth to help your business.
There are also changes if the decedent is a business partner or longtime employee. Although you are grieving, you will still need to find a replacement for the person.
What Can You Do to Minimize the Effect of Life Changes on Your Company Finances?
Recognize that change is inevitable and prepare. Unfortunately, when you are the business owner, there is no such thing as personal, sick or maternity leave. No one is going to pay you or reward you for these life changes. Instead of trying to ignore them all and push through with business as usual, you must have ways to deal with them head on. For instance, you might want to inform clients or customers, particularly if the information is going to become public or there will be a noticeable change in your business. In most cases, they will appreciate your honesty and your choice to put things on hold temporarily instead of making them accept mediocre work.
Create a disaster management plan. This will help to prevent confusion and uncertainty when sudden events occur. Your plan should include factors such as where you will work if something happens to your normal facilities, how to get in touch with all employees and key stakeholders and the location of your business emergency fund.
Develop a plan of succession. Accidents and illness typically happen without warning. You don’t want to leave it in the hands of others to decide how your business will be run in your absence. There must be clear organizational lines so that everyone is aware of who is meant to step up when one person is unable to fulfill his or her duties for any reason.
Avoid making any big decisions. Of course, just because you are going through a personal crisis doesn’t mean your business must come to a halt. With the right systems and people in place, it’s possible for things to carry on as usual. Plans are made, the sales team continues to convert leads, supplies come in and product goes out without interruption. However, you may want to pass up the temptation to make any major changes or pronouncements. It’s natural to want to make a fresh start or erase all traces of someone who won’t be around anymore. Nevertheless, this is not the time to make rash decisions or big purchases. You might believe you are just fine but in truth your small business skills might not be up to par. Take the necessary time to sort through your feelings before making a decision you will regret later.
Don’t go through it alone. Many small business owners mistakenly believe that, as the big boss, they cannot ask for help. Sure, you don’t want to cry and spill your guts to every employee who will listen. Nonetheless, if you have a tight, supportive team, they will want to help you. You just have to tell them how. Open communication is important for any situation but is especially vital when things are tough. Also, don’t be afraid to get professional counseling if necessary. Do whatever it takes to get through your current state of affairs quickly so you can get back to running your business.
Automate as much of your business processes as possible. This will ensure that general operations can continue even in the midst of personal chaos.
Hire the right people. If you can’t trust your team to run things in your absence, then perhaps they are not the right people for you. Your business should operate like a smooth-running machine, even if you are not standing over everyone and checking every detail. Treat your staff with respect and always make payroll on time every time. This is how you encourage loyalty and motivate your team to do their best work.
Build your working capital. Every business will need an extra supply of small business cash at some point. If you don’t, you will have to borrow funds from one area of your business to supplement others. Worse, you may find yourself unable to manage daily expenses, which puts your business in danger of failure.
Buy yourself some time. Okay, we all get the same 24 hours in a day but you must use yours wisely. When you have surplus cash flow, don’t squander it. Use it to pay bills early or invest in future endeavors. That way, you are not always playing catch up and give yourself some breathing room. But first, you must know where to go for instant business funding.
Get emergency business funding from Financing Solutions (www.financingsolutionsnow.com). Most business owners have all of their money tied up in their businesses. A majority of those funds are tied up in funding account receivables.
Therefore it is really hard to get money out of your business when home emergencies occur. Since these funds are not liquid, you can’t just pull them out whenever you need to.
A business line of credit (LOC) from Financing Solutions allows you to have a backup plan. The LOC costs nothing to get in place and nothing until you need it and it is very easy to get set up.
With fast small business funding from Financing Solutions, your company finances don’t have to suffer as a result of life changes. This can give you the financial peace of mind it takes to get through any transition and move onward and upward.