By | Dawn Castell
Once you’ve gotten your business off the ground, it can be tempting to rest on your laurels and just trust that your finances will stabilize automatically. But that can be a mistake, as there are still many obstacles ahead and many unforeseen difficulties that can end up costing you. By planning for the future by doing a few key things in the present, you’ll be on your way to financial stability in no time.
1. Explore Financing Options
Often when a company is still young, you’ll find yourself without the appropriate funds to fulfill orders or complete projects. If accessing financing through a bank isn’t an option, there are other ways to gain immediate access to funds, like through purchase order financing. In this kind of financing, you’ll sell your company’s transaction invoices to a third party to get your money more quickly for a small commission.
By using an option like this, your company will be able to have the money it needs to continue business, no matter what other financial circumstances may be in place. You won’t have debt to pay off later, and you’ll be able to take more new contracts on without worrying about the possibility of financial instability. And unlike a lot of common forms of bank financing, it’s easy to qualify for and won’t create more stress down the road.
2. Create an Emergency Fund
This may seem like an obvious point, but it’s so important that it’s worth stating the obvious. Having a rainy day or emergency fund for your business is just the smart thing to do. Catastrophe can and will almost certainly occur, and being prepared for it monetarily will put your business in the best possible position to handle it.
It’s recommended to have the funds to run your company for at least three months beyond cessation of regular cash flow, and it may be wise to set up a similar personal fund for yourself so that in the event of an emergency, your own situation will be stable enough for you to focus on the business. No matter how smoothly things are currently operating, thinking ahead is the best way to keep your business stable.
3. Maintain Customer Loyalty
Sometimes it’s hard to focus on the customers you already have when you’re trying to gain new ones. A growing company will have a lot of manpower focused on attracting new clientele and getting your name out there. But the biggest mistake you could make when growing your business is to neglect your customers and risk losing their loyalty. By having a solid foundation of returning customers, you’ll be ensuring stability for your company, as well as establishing a good reputation.
Customer loyalty is bought with consistent and clear communication. By being transparent with customers, you can find out their needs and attempt to fulfill them. Offering personalized and regular service for existing customers will make them feel that their loyalty is worthwhile, and they’ll stick with your business no matter what.
4. Pay Off Debt
Most businesses have to take out a loan when starting out, so it’s important to know what outstanding loans you have as your business gains stability. It might be tempting to put loan payments on the back burner when deciding where money should be allocated, but doing so will set you up for trouble when interest begins to build.
Prioritizing your debt will help you to become financially independent as a company. Make a plan for paying off your loans as soon as possible, and try to pay more than the minimum to avoid snowballing interest. It won’t be the most glamorous part of your budget, by far, but you’ll be thankful you took care of it first.
By staying on top of your finances and doing a few, simple things, you’ll be sending your business into the future with its best foot forward. Financial stability is an important goal for any business, and by using these tips you’ll be on your way to accomplishing that goal in no time at all.
