BottomLine is a team made up of marketing, digital, and business professionals. Each month a member of our team contributes a topic to our blog in their skillset. This month’s blog comes to us courtesy of Claire Giblay, our Finance Manager.
We often begin the New Year with a list of resolutions, where we seek to eliminate our bad habits and pick up new, productive practices. After a tumultuous and exhausting year, what do our resolutions look like for 2021?
Whether you’re a business owner, employee, or self-employed, you’re bound to have been affected one way or another by the pandemic. But there is nothing like a brand calendar to inspire us to turn over a new leaf, including getting our personal and business finances in order. By now, we may have realized that during these unprecedented times, being financially prepared makes all the difference.
Here are the reasons why being financially equipped is important:
- It is good for your physical and mental well-being.
Science proves it! Studies found that financial security is a direct predictor of your wellbeing. Financial stress is burdensome and can trigger mental and emotional distress. By doing the necessary work to get your finances in order, you’re also adding years and greater security thus improving your quality of life.
- It provides you with more opportunities in life.
If you are financially prepared, you are adding more options and opportunities to your life. Your chances of owning a home increases, as do the chances for new business ventures, getting an insurance plan, or investing for your retirement or large purchase down the road.
- It secures your future.
One thing is for sure, you don’t need to become a millionaire to be financially secure. Financial security simply is controlling your own money. It means having enough income to cover expenses, being debt-free, and having savings to cover for any setbacks.
For businesses, the COVID-19 crisis has proved to be very challenging. To help businesses recover and thrive, here are tips on how to manage finances in the new normal.
- Assess where you’re at
You need to examine your financial condition to manage your business moving forward. This involves collecting and analyzing the records of what you own (your assets) and what you owe (your liabilities). This also includes re-evaluating your emergency funds available (if you have any).
- Go over your cash flow
Identify your revenue streams. Adjust expenses in your business operations. Set priorities on which expenses need to be settled immediately and which can be postponed. Prioritize paying back debts to keep you from incurring compounding interests.
- Create an income growth strategy
You need to come up with a strategy to increase your income so that business performance can return smoothly. You can bring innovations to suit your customer needs, increase your geographic reach, establish a formal referral program, or develop strategic partnerships. You can also optimize your memberships by joining a business, trade, or other membership organizations. Knowing how to manage your growth is paramount for long-term success.
- Introduce innovation
Consider and study possible technological advancements that may help promote your business or ease your day-to-day operations. You can get a new reporting feature that records all your transactions in real-time and be able to monitor it online without the hassle of paperwork or going to the office. Or maybe take advantage of the future trends in digital like AI, IoT, or VR. Innovation management is challenging and may take time but the benefit you would gain from it would be exceptional.
What are your New Years’ resolutions for 2021? If you’re looking to break out of the mold, shake the dust off, and create a plan for growth in the New Year, we’d love to talk! We specialize in helping brands hit the next level.