Developing and protecting a healthy small business is done through simple, unseen ways. Much like washing our hands, daily tasks that we don’t usually find time for are the things that protect us from the unexpected.
Life is unpredictable. I’m sure I speak for all of us when I say our boat has been rocked this year. None of us could have fathomed 2020 would become so uncertain. Suddenly everyone is obsessed with washing hands; as if it is something new. We took a basic task for granted and forgot that the simplest of things are what provide the most protection and promote health.
It’s a period of time for small businesses to get back to the basics in order to survive and move forward. There’s no question that small businesses are some of the hardest hit in recent days – sucker-punched by the unexpected.
Instead of waiting for circumstances to get back to normal, let’s be proactive and fluid as we adjust to changing times.
11 Ways To A Healthy Small Business
1.UNDERSTAND THE TIMES
Everything is changing. Not just right now, but it will again. There’s one thing we can always expect: the unexpected. Keeping a pulse on what is important to our society, specifically, your target audience, will help your business adapt. Right now, the entire world is focused on staying healthy. More specifically, preventing the transmission of germs. How can you tap into, or align, with what the world is hyper-focused on at the moment? How does it change how you do business? Can you offer a slightly different product or service? Do you need to change how you do business to develop a measure of safety or peace of mind to potential customers?
Times always change. Understand the times. Connect with the current conversations.
2. GET OUT OF DEBT, FAST!
Getting out of debt is always a good idea, but the trillions of dollars that the government is handing out, plus the economic slowdown, will cause additional future strain in our nation. The less debt you have, the better off your business will be.
3. BUILD UP A 40-DAY CASH RESERVE, MINIMUM. (preferably 3-months)
Unexpected times always come with unexpected expenses. If you want to stay strong as a business, having cash-on-hand is critical. The nation doesn’t have to go through a major crisis for you to need a cash reserve. Your city or your own life can have an unexpected event or need. Having cash available alleviates an immense amount of stress.
Why 40-days? The Bible highlights this as a significant number and length of time. I took notice and realized it’s a wise timeframe. I also learned that in the past, during plagues, boats, and places with infected persons were quarantined for 40-days. Quarantine actually means “40 days”, so there’s that. That’s why I’m recommending 40-days. Even so, saving 3-months of expenses is better, but only if you are already debt-free.
4. STREAMLINE EXPENSES
Until you have a minimum 40-days of cash reserves, you should operate under minimum expenses. Check your bank statement for recurring charges and eliminate non-essential expenses, even if they are only $10. Are there free options for some services that you use? (Canva, MailChimp, ConstantContact, etc). All those little expenses add up!
5.CONSIDER HIRING TEAM MEMBERS AS 1099 CONTRACTORS
This can be counter-intuitive… but is it time to bring on a team member so you can grow? (If you’re not strong in social media, hire someone NOW). Personally, I prefer 1099 workers so there are no taxes to pay/file and during lean times, there’s no payroll pressure. Plus, the 1099 person has the flexibility to look for other clients as well. As you’ll see later, if you are the only one running your business, you’re especially vulnerable.
Talk to a tax professional about the benefits of contract labor (1099) vs employees.
6.LOOK FOR AFFORDABLE HEALTH PROGRAMS
Healthcare is high on everyone’s radar at the moment. For many, group health plans, and even the government marketplace are too expensive. Private and charitable clinics are popping up around the nation to help make healthcare affordable. Some have programs for self-employed and small business employers. This can give you an upper edge if you do hire as you can cover or offset some healthcare costs as a benefit – and it won’t break the bank.
Here’s the program I use where I live: FaithCare.
Colorado has a primary care program through PeakMed. Check your area to see if there are similar charitable or health membership programs.
7. ADJUST PRICING
When people are in the middle or coming out of a major event, they become a bit edgy or skeptical. Many businesses, as they begin to reopen, will be tempted to raise prices to cover the loss they’ve experienced. Let me encourage you to resist that temptation. Unless it’s absolutely necessary to raise prices to stay open, consider slightly reducing them. I’m not an economic expert, but in my experience, when times are tough, raising prices out of fear almost always backfires. Also, the 2020 COVID pandemic will most likely result in a period of inflation. Stand out among the crowd, if you can, by offering reduced rates to attract and keep clients or customers. There’s a balance here. Prices that are too low are destructive as well – not to mention, discouraging. Find a reasonable price point for your service or product – one that has a profit but isn’t too high, and stick with it for some time. As you get out of debt and start building a cash reserve, then you’re in a position to gradually increase rates.
A healthy small business is an open small business, and, with a positive cash flow. Operating slow and steady, debt-free, will go farther than a business taking on loans and raising prices to cover their payments. Your mindset of either peace or panic WILL come through. People pick up on it subconsciously and it impacts your bottom line.
8.CREATE SYSTEMS AND CONTINGENCY PLANS
Are you prepared for the “what if’s” of life? What if you are injured? Can your business continue without your involvement for awhile? Many microbusinesses are sole-proprietors. How do you protect your business from an injury or other unforeseen events? Contingency plans are necessary and I think most of us have learned this the hard way in 2020. Create systems that make it easy for someone to step into your role for a time. Also, check out this Business Continuity planning resource from Mule Management, LTD .
9.LEARN TO USE A CASH FLOW STATEMENT
The cash flow statement is one of the best financial tools for your business! Learning to update, read, and forecast with a cash flow statement saved my business when our city experienced 2 wildfires and floods within a few short years, effectively slashing my business to almost nothing. While other stores closed, and the rest borrowed large amounts of money to stay open, I scraped by without any debt. Much of it because I utilized the cash flow statement to plan ahead by creating worst and best-case scenarios, and easily see where I could cut back expenses. I can’t reinforce enough how important using a cash flow statement is. (Need mentoring on how to create and use a cash flow statement? Schedule a session here.)
10. DEVELOP MULTIPLE STREAMS OF REVENUE
Those businesses that didn’t have a strong social or online presence are now scrambling to catch up. We don’t know what the future holds for our nation as far as what types of businesses will thrive. But consider the different ways you can generate streams of income. If you’re local, can you expand online? Are you online? Maybe you want to reach out to local customers. Becoming reliant on one particular way to do business leaves you vulnerable. Even now, I primarily have local clients that are secured through word of mouth and networking. Networking is currently on-hold due to social distancing. I’ve thought about digital courses and e-books for years but didn’t make it a priority. Recent events only reinforce the importance of developing multiple ways to generate revenue.
11. LET GO OF THE OLD
When our way of doing business is disrupted, we naturally scramble to return circumstances back to the way things were. We like “normal”. It’s comfortable. But when life resembles a Fruit Basket Upset, like we are now, looking back at the old way of doing things keeps us from embracing the new. The only good looking back does is to show us the way NOT to go.
Developing a healthy small business means we have to do the things we’d rather put off doing. Taking 30-seconds to wash our hands prevents disease. In the same way, taking a few easy steps, that are not part of the core operations of our business (but really are), will help protect your business from future unexpected events.
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