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  • Looking Ahead: Financial Planning Strategies for the Future

    Posted by Natalie Paris on May 8, 2024 at 9:06 am

    Many times, this is because they’re unaware of what to plan for, so they sweep it under the rug to deal with another day. As a business owner, it’s critical that you have your assets in place for when the future arrives!

    Read on for five must-have strategies to help you secure a healthier financial future.

    Create a budget.

    Giving every dollar in your business a job will help you utilize your money intentionally.

    When you have a defined budget, you know exactly where your money is going so you can make the right decisions for a financially fit future.

    To create a budget, estimate your monthly expenses and revenue and create your budget from there to ensure you remain profitable. This will help you identify where you can cut costs, increase revenue, and put more profit in your pocket for the future.

    Here’s an example of a budget breakdown.

    *Note: Please keep in mind that yours may look different depending on your specific needs.

    • Business expenses such as rent, utilities, equipment, inventory, etc.: 55%
    • Employee expenses such as salary & payroll taxes: 25%
    • Business insurance: 5%
    • Retirement: 5%
    • Paying yourself: 10%

    Online software programs like Tekmetric are designed to help automotive businesses create a budget, manage inventory, and stay on track with real-time data.

    Build an emergency fund.

    Unforeseen events will arise in your business from time to time. An emergency fund will act as a cushion when these occur. Having extra funds for those just-in-case moments will help you navigate emergencies without accruing unwanted credit card debt or loans.

    We recommend building an emergency fund with enough cash to cover six months of expenses. Creating a separate account for this will help you avoid accidentally dipping into these savings.

    Diversify your revenue streams.

    The market can be unpredictable, which is why we encourage our clients NOT to put all of their revenue eggs in one basket. Relying on one income stream can be risky because there is always the potential for it to dry up.

    Instead, explore different ways to sell your services and products.

    • Can you market your products and services to other demographics?
    • Can you develop partnerships with other businesses in the industry?
    • Can you expand your sales channels to include additional platforms?
    • Can you create customer retention strategies such as loyalty programs?

    Invest in your employees.

    Your employees are the cogs that keep your business running. Investing in them will set the wheel up for sustainable growth.

    Providing quarterly or yearly training to keep up with market trends and updates gives your business a competitive edge and a well-known reputation in the community. Healthy reviews and positive word-of-mouth due to top-notch service lead to more customers through the door for an increase in revenue over time.

    However, we understand that employee retention can be a concern when it comes to investing in their careers. What if you spend money on training, and they decide to quit a few months later?

    Consider implementing an employee incentive program to help reduce the risk of wasted funds. Performance-based bonuses, recognition awards, and employee appreciation gifts are just a few of the ways to promote a healthy work environment that will help retain your team.

    Have the right insurance policies.

    Insurance policies give you peace of mind that you will have financial security despite any bumps in the business road.

    Different types of insurance offer different benefits, so it’s important to carefully consider policies appropriate for your business.

    A few types to explore include general liability insurance, property insurance, business interruption insurance, worker’s compensation insurance, commercial auto insurance, product liability insurance, and employment practices liability insurance.

    Natalie Paris replied 2 weeks ago 1 Member · 0 Replies
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