The world shook on its axis when the pandemic was declared in the year 2020. Nothing like this has ever happened in the history of the human race and every industry has felt the shock waves. After the initial lull, people started adapting to the new norm by wearing a mask and bringing school and office to home virtually. Charles Darwin has given this unique ability of the human race to adapt to such changes, a famous term- survival of the fittest. The year 2021 is facing the second and third wave of the pandemic and the businesses have to prepare themselves with new strategies and tips for survival.
It is said time and again that every business has a unique DNA. Hence, there is no foolproof magic pill for survival. There are certain common points or tweaks every business can follow easily for better management of its affairs. It is better to draw up a checklist of strategies and tips to ride the wave of change smoothly.
Checklist of strategies and tips for businesses in the year 2021
1. Compensate yourself for the work done
Every start-up and small business will primarily focus on the growth of the business to attain breakeven as fast as possible. It is a common practice to put the personal compensation back into the business. The problem with this method is, if by any unforeseen circumstances or bad luck, the business hit rock bottom, there will be no money to fall back on for the business or start-up owners. It is age-old wisdom to save for the rainy day!
2. Maintain a contingency fund for the business
Every business, whether it is a start-up or small business, must maintain a contingency fund for unforeseen social, economic, or political changes. It is a good idea to give a target to the contingency fund at the time of budgeting. If needed, revise the fund to meet the changed circumstances.
3. Attain a good credit score
It is an acceptable practice in business to give and take credit. It is important to keep a track of both amount receivable and the amount payable. The golden rule to follow to the T is to ensure that amount payable is always paid well before the credit period.
4. Re-evaluate the budget
Every business should have a periodic evaluation of its budget. The purpose of this evaluation is to ensure that every aspect mentioned in the budget is been strictly adhered to. As and when required, the components mentioned in the budget must be reviewed to meet the current business needs.
5. Be aware of the growth opportunities
Every business should take a calculated risk on informed opinion on the different growth possibilities of the business. A portion of funds must be set aside to invest in the growth of the business. A word of caution is to make a thorough study about the growth opportunities before investing in them.
6. Monitor the Financial records
The financial records of the business need to be religiously monitored along with the financial service providers to know the real state of the business. This is the reason why the financial service providers give regular MIS about the financial records and take time to educate the key decision-makers or managers of the business on the various components of the records.
7. Monitor expenses and return on investments
Every business will monitor the expenses, but it is equally important to keep an eye on the return on the investments. By monitoring, the bad investments can be stopped and the same can be invested into better opportunities.
8. Create and follow good financial habits
Taking time to create and follow good financial habits is a great stepping stone to success. Reviewing the budgets and investments, seeking professional help in the various financial activities, reviewing the daily MIS, etc are examples of setting internal controls and habits to the business.
9. Every step is important when it comes to guarding your finance
Every caution needed for the business has to be in place. Or every step to guard the finance of your business is not too much. Whether the sentence is made negatively or positively, this point must be engraved in the minds of every business owner or decision-maker.
10. Take the help of an expert
It is prudent to seek the expertise of a professional regarding the different financial activities of the business. Be it payroll management, bookkeeping, or management accounting, the experts will ease the workload and guide the business on the right path.
Diligen has always been the frontrunner in providing an expert helping hand in matters of finance. Every business needs to inculcate good financial habits for its success. A good financial service provider makes it their mission to steer the businesses into adopting the various strategies and tips to survive in these unforeseen and everchanging circumstances.