Preparing for a financial emergency – Top tips

Business, Finance - 23/12/2021

Is your business prepared for a financial emergency? What if you lose your biggest client? Or you need to make an unexpected big investment?

It’s not nice to think about, but sometimes curveballs are thrown at you. Burying your head in the sand and hoping for the best is never the right option for your business. It’s better to have a safety net in place if problems crop up. 

Prevention is always better than cure. We’re giving you some top tips to stay prepared in case your business faces a financial emergency.

Keep your accounts updated

The most important thing to be prepared, is to be aware of your business accounts. Staying up to date with your finances means you’ll always have a clear picture of where your business is at, what you can afford and what you need to do to avoid falling into debt.

There are plenty of ways to stay on top of your accounts, from automated systems to outsourcing. If you don’t have time to manage your bookkeeping on top of the other aspects of your business, we recommend outsourcing. That way, your accounts are in safe hands, and you have time free to focus on what you do best.

Set aside a contingency budget

A good rule of thumb is to save at least three months’ worth of business expenses in an emergency fund, which can keep your company afloat if something happens. 

It’s really important not to use these funds unless you absolutely have to. It might seem tempting to dip into the contingency budget every now and then for an extra financial boost, but the more you can use as a safety net if a crisis happens, the better.

Apply for small business insurance

Small business insurance will protect the company from risk in case of emergency. There are lots of different types of insurance, so do your research to find a package that’s best suited to your business needs.

Even though an insurance premium is another cost to add to your overhead expenses, it’s worth the investment to know that you’re covered if something happens. Think of it as an investment into your future. It’ll also give you more peace of mind knowing there’s some protection available to you if you need it.

It’s never too early to start preparing

If your business is doing well, you might be thinking an emergency plan isn’t necessary. But, as 2020 showed us, you never know what will happen in the future. And unfortunately, sometimes problems arise that you couldn’t have predicted. 

It’s never too early to start preparing for an emergency. Of course, you don’t want to be all doom and gloom, and you want to be optimistic about your business’s future. But it’s all about balance. Be ambitious, but be realistic too.

Seek expert guidance

If you’re unsure about how to best manage your accounts, it’s always better to seek advice from an expert. 

At Numero, we can help manage your accounts effectively and accurately so that you stay in the know and on top of your finances. It’s in your best interest to stay prepared for anything that’s thrown your way. And it’s in our best interest to protect your interests. 

To find out more about our services, get in touch with us today.