When you visualize your ideal business, it may all appear rosy in your mind, but the reality is that you’ve got to build up a tolerance for the obstacles that stand in your way.
Effective problem-solving means you can always get into the right mindset to protect your business.
Building a safety net ensures that you can thrive during economic downturns and become more robust in your defenses. What are the best ways for you to build a safety net for your business?
Lines of Credit
A business line of credit is a flexible loan that will consist of a fixed amount.
If you are experiencing debt issues, you can borrow a specific amount of money to keep yourself ticking over. You can use financing as an emergency fund as and when you need it.
Keyman Insurance
This works as a life insurance policy that will recoup the financial loss if there is a sudden death of an employee.
For example, if something were to happen to the CEO, this could have a negative impact on the organization.
Keyman insurance gives you the opportunity to find a replacement and potentially pay off debt or severance to specific employees. You have to remember that keyman insurance will only cover a valuable employee, rather than any employee.
Building Up a Cash Reserve
This can be a very difficult thing to achieve, but you’ve got to ensure that a 6-month cash reserve should be in place.
To do this, you need to consider a variety of the expenses and if they are actually “essential.”
When you start to factor in the overall costs and decide on which parts of the business are essential, which can be outsourced, and which can be consolidated. This gives you a better estimate of how much you would need if there were major economic problems.
Consulting as a Side Hustle
Consulting can help you to keep yourself afloat, but you can also earn a lot of money in the process that you can invest back into your business.
A lot of people talk about the dangers of investing your own personal finances into your business, but one of the best ways to get the balance right is in consulting.
You are using the experience you’ve leveraged being in charge of a business to help others. It’s a great way to pay it forward, but it can also make people more aware of your business. In effect, it is free promotion.
Read also: How to Make Money as a Consultant
Find a Partner
If you are trying to keep everything smooth and steady, finding a business partner is a great way for you to bring other ideas to the table, but can also help you to become a better leader.
When you start to figure out the best ways to cover your finances and make sure you have a safety net, a partner can be invaluable for a wide variety of reasons.
Safety nets come in many different forms. If you’re trying to protect your business, some of these can make a big difference.
