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Get Your Budget Out of Hot Water: When Finances and Circumstances Collide

Get Your Budget Out of Hot Water: When Finances and Circumstances Collide

Regardless of how successful a business is or how awesome the owner is, sometimes things happen that are out of our control.  These things may cause the business to suffer, and sometimes it may not be able to recover.  The key to safeguarding against these types of circumstances is to be prepared before they happen, and have a plan to set things back in order as soon as possible should the worst case arise.

In the Beginning

From day one trying to get a loan, give yourself plenty of cushion.  Add a reasonable amount to what you think you might need so that when the unexpected happens, you can handle it rather than wondering where the funds to fix it are going to come from.  For example, if you think you are going to need $1,000 to prepare the location for opening, add a little more just to be certain that anything unexpected is covered. Of course the lenders will required quotes and bids on major expenditures, so you will have to have logic behind anything you do, but there are always contingencies, and those should be in the budget from the beginning.

Plan for the Worst, Buying the Best

It is not always necessary to buy the most expensive available, but it is necessary to buy the best you can with what you have.  Skimping on quality to save money only leads to trouble in the long term.  Avoiding this kind of trouble is relatively easy if you simply buy quality products to begin with.  The old adage that you get what you pay for is definitely true, and if it comes with a warranty or guarantee, that is even better.  It might cost a little more on the front end, but it will definitely save your budget on the back side.

Have a Back Up Plan

It is always a good idea to have a plan for running the business, if possible, should the worst happen.  If you get to work one morning and the building is burned to the ground or everything is flooded, could the business continue to run until repairs are made?  Some businesses could not no matter what you did.  Some businesses, however, could run from a temporary location as long as all of the files were available.  Every business should back electronic files up every day and store the back up at an off sight location such as a bank box.  This way, in some cases customers could be served from a temporary location or from another branch.

Also, each employee should know what is expected of them in case of an emergency. If they were to show up to work one day and one of these scenarios or something just as bad is unfolding, they need to know what their job is.  Are they to recover files and head to a temporary location?  Are they to begin calling customers or insurance agents?  If everyone knows their job, things will go much more smoothly.

The best way to ensure preparation in these situations is to practice.  Set up a day, unannounced, where everyone arrives to find the doors locked.  Tell them that the business cannot run from that location today and that they are to proceed with emergency operation protocol.  You will then be able to see if you are ready or if there is work still to be done.

You Cannot Predict the Future

Despite best efforts, the uncontrollable does happen.  Tornados come, flood waters rise, and business owners are left to pick up the pieces.  The Small Business Administration offers disaster loans for times such as these.  They are designed to help businesses recoup losses and get back on their feet after a disaster in an effort to help the whole community.

The key to surviving when the unexpected happens is planning and preparation.  Imagine the worst case scenario and do whatever you can to prepare beforehand.  Then, in the face of disaster, remember there is help available to keep you from losing everything when finances


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by Faith Stewart // Wife, mom, and freelance writer that earned a BBA with a major in accounting and spent 10 years working in the field before pursuing her passion for helping small business owners and entrepreneurs through writing.

Opinions expressed by contributors are their own.