As an online business owner, your key concern is generating income for your online business. When money comes in, you have more to save for a rainy day. You also need more to spend on growing your business, and more money to pay off any debts you may have incurred.
But what happens when you don't have the cash-flow needed to keep your business going? What happens when disaster strikes?
At this present time, this obviously includes the pandemic situation that is causing many businesses to struggle, but there could also be other problems that affect your finances.
There are a few things you can do to save your business, and these include the following.
#1: Speed up Your Receivables
Your receivables are the payments that are owed to your business, so you should do what you can to make sure you get them quickly. This might involve asking for payments upfront when you offer a service to a client or invoicing them promptly when your work has been completed.
If the client is late with the payment, you should be persistent. While they may have forgotten to pay you on time, it might be that there are other reasons why they aren't paying you. You need to find out, either alone, or by using the services of a collections company who will collect the debt for you. Some services will also check bankruptcy records because if the customer has become insolvent, this is one factor why they aren't paying on time.
Hopefully, you will get back your money owed, and this will alleviate some of your financial worries. If not, be sure to claim it on your taxes as a loss!
This might involve asking for payments upfront when you offer a service to a client or invoicing them promptly when your work has been completed. #onlinebiz Click To Tweet#2: Cut Costs Where You Can
When you're going through financial crises, all unnecessary spending needs to be put on hold. This means no more fancy office lunches, no more subscriptions to services you don't need, and no more equipment purchases that aren't compulsory for your business.
You should also consider switching utility companies as you might find a cheaper deal elsewhere. Change insurance company too if your annual renewal is close, and look for a cheaper supplier, or ask for discounts from the firm you currently use.
Check out these other cost-cutting tips , and consider what else you might do to make savings in your business.
However, do be sure not to cut back too far like employees or freelancers that keep your company going. Really look over each and every expense before cutting any away.
When you're going through financial crises, all unnecessary spending needs to be put on hold. Click To Tweet#3: Bring More Money into Your Online Business
The obvious thing to do when you're financially struggling is to borrow money from somewhere. This could be from a bank, a loan company, or a credit card company. However, you do need to be careful.
The last thing you want is to end up in a lot of debt, so if you do go down this route, look for the lowest interest rates, and factor your payments into your current budget.
Of course, another way is to find other ways of generating income for your online business. Think outside of the old proverbial box!
Who knew when I started Inspire To Thrive that I'd be offering courses on social media? Conditions change and your business must be ready to pivot as well. Look for some more passive income channels for your online biz.
Other Tips for an Online Business Owner
There are other things you can do that won't get you into debt, of course. You should make a concerted effort to increase your marketing, using low-cost ways to market your business to help you save money and bring in more customers.
As an online business owner, you could also sell some of your non-essential assets. This is an effective way to raise some extra money while you're strapped for cash.
Also, be sure to check the latest grants being given out in the United States due to Covid-19. More could be coming - so be sure to keep an eye for them if you need.
These are just some of the things you can do to survive a financial crisis. For more advice, speak to an accountant, and research other avenues you can take by committing to a Google search online.
How is your online business surviving 2020? I'd love to know more in the comments below!
