Out of Money? Here’s Your Small Business Lifeline!

 

You know, being a small business owner in America is a bit like riding a roller coaster. You’ve got those exhilarating highs – setting your own rules, carving your own path, and well, being the boss. But there’s also the gut-dropping lows. And, sometimes, the worst happens: you’re flat-out out of money. But before you press the panic button, take a deep breath. This isn’t the end of the road, but a detour on your entrepreneurial journey. Let’s figure out how to navigate it together.

 

Hitting the Emergency Brake: Immediate Steps to Get Through the Crunch

Ever feel like you’re in one of those action movies, and everything’s on fire? Here’s how you play the hero and get your business back from the brink:

  1. Hustle for Quick Cash: You’ve got resources – they just need to be tapped right.
    • Got excess inventory? Hold a flash sale.
    • Can you provide a premium service or some consulting on the side? Give it a shot.
    • Go back to previous customers and check in how they are doing and whether you can help them with anything.
    • Do you have any previous sales conversation that you did not follow-up with? Do it now. Any person that said “no” to you in the past. Now is the time to check in with them and ask how they are doing and whether they made progress.
    • And if worst comes to worst: Get a side job to get in cash! Do whatever you have to do to get back on track.
  2. Trim the Fat: Tough times call for tough decisions. It might be time to reassess the essentials and let go of some luxuries.
    • Look through all your expenses – what is not needed anymore? Licenses that you don’t need anymore, software you don’t use anymore, any other services, products or trainings that you are not using anymore?
    • Do you rent any office space that you don’t need right now?
  3. Have “The Talk” with Your Creditors and Suppliers: Most folks value a good business relationship. A frank discussion about your current predicament might lead to new payment terms. Do not ghost your suppliers or creditors in this situation. Have an honest conversation and discuss options that are available.
  4. Dial 911: Emergency Funding: The U.S. Small Business Administration has your back with programs like the Economic Injury Disaster Loan (EIDL). Look it up. Seriously. [1]

 

Avoiding Deja Vu: Long-Term Strategies to Keep Your Finances Healthy

We don’t want a repeat, do we? So let’s look at ways to fireproof your business finances for the long haul:

  1. Give Your Business Model a Makeover: Sometimes, your “out of money” moment can be traced back to a flaw in your business blueprint. Time for some introspection – and maybe, a little reinvention.
    • Introduce services that are recurring and that don’t require new clients every month
    • Rework your pricing structure
    • Work on your sales funnel and make sure to use more upsells and cross sells
    • Introduce referral systems and loyalty programs
    • Diversify your income streams
  2. Get a Money Guru: Think about bringing in a financial advisor. They can help you master budgeting, cash flow management, and just sound money moves for your business.
  3. Squirrel Away a Rainy Day Fund: Just like you’ve got a personal emergency fund (you do, right?), your business needs a safety net too. Aim for enough to cover about 3-6 months of expenses.
  4. Consider Bringing in the Big Guns: External investors can inject your business with a much-needed cash boost. But remember, they’ll want a piece of your pie in return.

 

Lessons Learned: The Pandemic and Small Businesses

The COVID-19 storm hit small businesses hard. According to the U.S. Census Bureau, almost 75% of us hustled for assistance through the Paycheck Protection Program (PPP) in 2020, and over 38% sought aid through the EIDL program. [2] That just goes to show how crucial these lifelines can be.

But you know what? The small businesses that really thrived were those that could pivot, get creative, and switch gears fast. The moral of the story? Adaptability and ingenuity can be your best friends in the entrepreneurial world.

So, when the chips are down, remember – you’re not out, you’re just getting started. With a little strategy, some gumption, and maybe a bit of help, you can navigate this “out of money” moment and come out on top.

In the end, remember, running “out of money” isn’t a death sentence for your business. It’s a wake-up call, a chance to shake things up, to reevaluate and come back stronger. You’ve got this!