Finances are Top of Mind
In this article, we will cover 5 steps that are crucial in to manage finances during and after a time of crisis. As a former RIA and Financial Advisor, Greg Johnson gives us some great insights here and in the Women at Halftime Podcast. The topic of managing finances is extremely relevant and top-of-mind as many businesses have been completely shut down for a period of months. How do you survive and how do you start up again?
First and foremost, you want to make sure your ship doesn’t sink. It’s all hands-on deck and you may have to work extremely hard for a while to get back up and running. This is an important mindset that we all need to have right now. Eliminate what isn’t needed and focus on what is absolutely necessary.
Five Steps to Manage Finances During a Crisis
Step One: Realize this is short term. Take a deep breath because you’re going to have to hold it for awhile. Everything that seems draconian will end. One of the worst things you can do is panic. With fear and panic comes the possibility of drowning. So calm down, take that breath, focus and swim!
A turtle retreats in its shell to protect itself. You are going to have to be like that turtle in a shell in the short-term. Don’t hide, but hunker down and minimize as much as you can
Step Two: Get really honest with yourself and your team. How long can you last? As you eliminate unnecessary expenses, you may find you can last a lot longer than you thought!
One of the areas I warn entrepreneurs about is being membership poor. This occurs at all levels, not just beginners! There are so many different products, plugins and programs available, but if you add up all the yearly fees that are automatically charged, you may be shocked! This is a huge deal. Many mid-to large organizations have trimmed down their expenses and are actually doing very well. As solopreneurs, we can learn from them!
Step Three: Figure out four months of income. Most small businesses can last up to three months if they’re careful, but you want to stretch this out. How much will you be short and how can you cut costs to thrive for four months?
Some can negotiate a reduction in lease payments. I would advise against totally defaulting on any lease as the law does state you’ll have to pay it back. Honest communication with your landlord may work to your advantage. If you haven’t been working in your office, your utilities should be lower. Work to minimize insurance payments and unfortunately, you may have to let some employees go. Although, this may be a good outcome for ridding some non-productive personnel! One thing to NOT cut is your marketing and sales. In fact, you need to be stronger than ever in this area! Those who execute marketing through a crisis come out if it first in their industry. The faster you come out of it, the faster you can hire back!
Step Four: Gather all the low-hanging fruit. Sales that you may have passed on in good times need to be now converted to income. In fact, you may move up the timeline for some of the products and offers you present because the timing may be perfect right after a crisis. In the financial services, health and life insurance are low-hanging fruit that can be acted on immediately and during the crisis.
I have done this with my Music Membership Learn Music Again. I started the program because I’ve heard many comments from those who used to play while growing up, I’d love to get back to my piano (music!) But do they ever start? No! But during and after a crisis seems to be the perfect time. Stress is high and people are seeing the value of getting to some of the things on their bucket list they enjoy. So I worked extremely hard to get this program going sooner than later!
Step Five: Communicate with your team about all hands-on deck. Your team needs to be a part of the process of rebuilding. You may be surprised at the resolve and excitement of everyone when you gather them together.
Be ready to work hard but work with resolve and focus. The crisis can be short-term if you start acting now! There is a difference in what you should be doing and what you are doing. Don’t be stuck in the should! I hope you find this insightful and extremely helpful, no matter what time period you are listening or what you are facing.
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Putting all the Questions to Ask Together
All five areas, including defining your end goal, who or what you want to impact, your mindset, relationships and health are a good basic guide for the questions to ask at halftime and any time.
If facing a job interview, ask yourself if it will create the type of lifestyle you desire. When at the grocery store, purchase what will be good for your health. Make your personal questions simple, then regroup when needed. Most of all, realize that halftime is a great time of life! Have fun and enjoy every moment you can!
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