Members Share: Essential Financial Advice To Help You Rebuild

Before I joined Alignable, I spent a few months as a freelance content strategist, which is the first time I’ve run my own business. And wow, I got a lot of things wrong. Among my worst missteps was money: what to charge, when to invoice, and how to actually make a living. 

If I had been an Alignable member, I could have asked other freelancers how they set up their financial house. Instead mine swayed like it was made of toothpicks, and eventually...well, we’ll get to that later.

That experience was a pinprick of what it’s like to be a small business owner, and that was before a global pandemic. As we reopen, there are more challenges—how do you make up for lost revenue, handle costs to pay for PPE, and prep for future hardship?

What’s the Best Money Advice for Small Businesses Now?

Thankfully, you don’t have to rely on my (lack of) financial smarts for answers—that’s what the thousands of finance experts on Alignable are here for. So we asked them: What’s the best money advice for small businesses now? Their answers were so spot-on that we wanted to share them with you. 

While I’m sure you know more about managing your money than I did, it doesn’t hurt to hear from the pros. If you’re not seeing the answers you’re looking for, ask a question to our members. They’re always willing to help, just part of the reason we love them so much.

Your Top Money Concerns

So how are things going financially for you? 

If you’re like over 15,000 members who replied to a recent poll, you might be struggling. Over half of respondents said they were operating with 50% or less of their revenue at the end of May as compared to before the crisis. That’s a tough spot to be in—and also a stressful one. 

And when we asked what your biggest money concerns were, your top answer was your financial resources drying up.

Proven Financial Tips to Help You Rebuild After a Crisis

While we can’t boost your bottom line (though we’d love to), we can share some advice from the nearly 200 financial experts we chatted with on what to do next. 

Know your numbers

My biggest tips for business owners—know your numbers!

It's hard to know what your next move is without knowing where you stand now. That's why so many of our money experts talked about staying on top of your numbers.

"My biggest tips for business owners—know your numbers! Look at them daily, if not two or more times a day, before opening in the morning and after closing at night. Your numbers tell you exactly what is happening in your business," says Danielle McCarthy from Five Rings Financial. 

"Do you need to redirect funds, pivot business, or redirect marketing? Where can funds be saved, redirected, or conserved? The time is ripe for innovation, creativity, imagination," she explains. 

Make a plan by following these 3 steps

Now that you know where you stand, you can move into the fun stuff: planning. 

Sam Brownell from Stratus Wealth Advisors shared three steps you can take to set up a plan now.

Step 1: Analyze your cash flow: "Make realistic revenue projections for the next six months. Then subtract your fixed and variable cash expenses.  Finally, see how long your current cash balance will cover any cash shortfalls. Knowing when you may run short on cash allows you to create mitigation strategies before you have $0 in your operating account." 

Step 2: Analyze your activities and services: "Ask yourself and your staff to write down your business's activities and services and then rank each on a scale of 1-10 based on how easy they are to teach to employees, whether they differentiate your business, and whether they create customer loyalty. 

Pruning poor performing activities and services and focusing your operations on your core activities and services can save you money now.

Step 3: Identify red flags and areas for growth by analyzing gaps in your services or activities. Reach out to a consultant if you need help.

Forecast your cash flow

The above plan includes projecting what might come in and what will go out. In other words, cash flow forecasting. "I recommend implementing a cash flow forecast with weekly review and updates," suggests Kevin Mills of ActionCOACH Lake Houston. 

Don't know where to start? Our members can help. Sumner Saeks of New Growth Advisors Inc wrote a great piece on forecasting and even included a 13-week cash flow forecasting template. 

You can download it here:
13-Week Cash-Flow Forecast Spreadsheet in Excel

Think about operational changes like part-time staff

As you analyze your costs and look for areas to cut, you might want to think about operational changes. One way to do this is using a flexible cost structure to move some spends from fixed to flexible, suggests Sam Brownell. 

"It's difficult but should be seriously considered. For example, [look at] labor costs for carrying full-time resources. Consider part time staff and outsourcing some activities such as transaction processing, payroll services, building maintenance," he suggests. 

If your revenue fell a ton: Reinvent and diversify

If you're in a state of negative cash flow and your revenue tanked, it might be time to think about diversifying your products or services, suggests Michael Sluka of Michael Sluka CM&AA. “I label it ‘reinventing,'" he says.

Diversifying involves balance, he points out. "Boundaries have to exist to keep the investment costs reasonable by looking for diversification that can be achieved without significantly altering the core operational process.”

For ideas on getting started, check out this article on how to diversify after coronavirus.

Offset PPE costs

With new regulations, you probably have to get PPE for your staff or customers. How do you handle the increased cost while also dealing with lower revenue? 

"I recommend business owners work as lean as possible to curb the extra expenses of PPE," says Ronique Carter of Strategic Alignment Group LLC. 

"Eliminate as much waste in your business processes as possible while not compromising the quality of your service or product. To do this, look at three areas 1. Business processes 2. technology and 3. people," she says.

Another idea for offsetting PPE costs is to add a surcharge for your customers."If you plan to provide PPE to customers be sure to re-coup these costs in your product/service pricing, even if listed as a separate line-item charge," suggests Kevin Mills of ActionCOACH Lake Houston. 

Keep on marketing 

One of the top tips from our finance experts was to continue advertising, even if you have to tighten up the budget. Finding and keeping new customers means more money to work with.

"Look for ways to leverage your marketing spend to effectively attract both past and new customers to your business," says Kevin Mills of ActionCOACH Lake Houston. 

Now is the time to aggressively advertise your business.

Judy Budd of Greater Wilmington Business Journal agrees. "Now is the time to aggressively advertise your business," she explains. "Not all marketing is about new business. At least 50% of your plan should be for maintenance--protecting your business and your competitive brand." 

"If you are not advertising, you will watch your competitors gain market share and it may be at your expense," she says.

Related: 6 Insider Tips to Market in Today's World

Reach out to your accountant

"My best tip would be to talk with your banker and accountant to ensure you are aware of all programs available to you. If you need help with cash flow, each can provide advice and potential solutions." says Susanne Whillans from Caisse Financial Group. 

If you don't have an accountant right now, ask your questions on Alignable.

Ask questions and keep us posted

Remember my toothpick house? In a turn of events everyone saw coming, it fell down. I learned I was charging less than half the hourly rate of others with the same experience, which explains why I was struggling to pay my rent…and sleep at night. If I ever find myself wanting to go solo, I’ll pop on Alignable and start asking questions. 

We hope you do the same. 

How’s it going for you right now? Are you seeing sales skyrocket or dipping low on reserves? Drop us a comment about how you’re doing. We’re here to talk and love to help. In fact, it’s why we created Alignable in the first place.

Can’t wait to hear from you.

For more ways to bounce back from the pandemic, check out the below reads

• How to Network and Build Business Relationships Online
• 4 Steps to Take to Kickstart Recovery Now
• The Best Communication Tips to Help Your Customers Stay Safe