3 Ways Business Owners can Get Back on Track
Small and mid-sized business owners have been greatly affected by the ups and downs of the economy and CNNMoney.com published an article suggesting different ways for businesses to get back on track. Financial planners Patrick Collins of Towson, Maryland, who specializes in advising small business owners and Martha Schilling from Upper Dublin, Pennsylvania said if you want to get back on track, you have to take a careful look at what are economic "must-do items" and what are merely "want-to-do items." It may be tough to defer some "want-to" items while you get back on a more solid economic foundation, but trade-offs and deferrals my be essential to your long-term success. For most businesses, three key "must-do" items are the following:
1. As a small or mid-size business owner, pay yourself first. One big mistake many business owners make is that they pay their employees first, and pay themselves with whatever is left over. As a business owner, you should pay yourself the same salary you would pay someone else do to your job. If this creates some red ink, you may have to let someone go. It may not be easy to lay someone off, however, you need to pay your bills as well.
2. Bulk up your "emergency fund" - Small and mid-size business owners with fluctuating income need to have at least 12-18 months worth of living expenses in bank. This amount will help smooth out cash flow and cover unplanned expenses. If you start to see an increase in your business profits, put every extra dollar into your emergency fund.
3. Plan to restart retirement savings. - As soon as you have replenished your emergency fund, go back to making contributions into your 401(k).
To read more on this topic see How to bounce back your small business from financial woes.
Business owners need to have financial plans and strategies in place to stay viable. Contact Wood, Atter & Wolf, P.A. to speak with a business attorney. Legal representation can help you formulate plans to quickly get your business and life back on track.
