Let chaos become your opportunityApril 22nd, 2020 by Morna
These are crazy, chaotic times we are in. You have lots of unknowns.
Are you bringing in business — and income — today? If you are, that’s great.
Can you maintain a positive cash flow? And for how long?
Do you have a rainy day fund? How long will it last?
How long can you stay the course before making changes? And what changes can you make?
Even if you are in a positive cash flow position, you need to think about what will happen in the future. Right now.
While you do have unknowns, one fact remains. You are in control when it comes to your business.
Part of getting through the chaos is making sure you’re in a better position once you get to the other side. Here are some ideas to help shift your business as we move forward.
1. Shore up your rainy day fund
You’ve likely heard the term before as it applies to your state government. Every state has a rainy day fund for times when there is a budget deficit.
Your rainy day fund is an amount of money that you set aside for times when you regular income is disrupted. It might be anywhere from 1-6 months worth of business expenses. You incur those expenses whether or not you have income.
If you don’t have a rainy day fund, it’s time to get started creating one. It may be hard now, but take the time to figure out how you will start to save a set amount. Set a deadline for yourself. Even now, you can save small amounts. Once you are on your feet, you can increase what you save.
If want a resource to help you look at your business and start saving, take a look at Profit First by Mike Michalowicz. This book has been used by many creatives to manage their cash flow and save money.
Here’s a tip for where you can find the funds to get started. In our Members Studio, we do an exercise called 50 Ways to Find Cash Today.
Take time to make of list of 50 ways for yourself. I know you can find money if you need to. No idea is off limit. It might be adding a class. Selling your fabric or books or unused notions on Ebay. It might be something completely out of left field. Years ago, I had an abundance of catnip in my garden. I called my local herb shop and sold my excess on an ongoing basis.
And if you have a more immediate need, be sure to look into applying for Payroll Protection Plan and/or the Economic Injury
Disaster Loan from the government.
2. Evaluate your revenue streams
Look at how you are bringing cash into your business.
Do you have just one revenue stream?
I remember a time when I was teaching quilting classes at two stores and selling my work through commissions and at high-end craft shows. In one January, the first store went out of business after 150 years. That same month the other store decided to cut out its dress goods in favor of its decorator fabric. Both my teaching gigs dried up. If I hadn’t had my art quilting revenue stream, I’d have been out of luck.
How can you add additional revenue streams to your business?
If you are a teacher, you can publish the patterns you created for your classes. You can start to teach online classes. You can package your classes with product that you either ship yourself or have drop-shipped by your local shop.
If you are a brick and mortar store, you can pivot your focus to more online sales, particularly as our current situation may limit in-store purchasing.
If you are designer, you can add online teaching to your repertoire.
As you look at where you can add revenue streams, consider what you need to learn to do this. You may need to learn about teaching online. You may need to learn photoshop skills. You may need to learn more about social media.
Schedule that learning time now.
Should you eliminate revenue streams?
Another consideration is whether you should stop doing something. If you are expending more effort on a particular revenue stream than it’s worth, it’s time to think about stopping. Your time would be better spent adding a stream that was more lucrative or expanding one that is already profitable.
Make this consideration sooner rather than later. Then put your energy where it will do you and your business the most good.
3. Consider your future client
We are talking about emerging from this chaotic time in a better position.
You will be different. Your client will also be different.
You need to determine who the client is that you’ll be working with in the future.
For one thing, I’m sure your client will be more tech savvy. After all, everyone can now use zoom. They are experiencing new ways of learning. You are experiencing new ways of teaching, sharing, serving, and selling.
What will this new client need from you?
Once you figure that out, you can focus on you and your business being congruent with your customer and their needs.
It’s your turn!
What actions are you taking to emerge from the chaos in a better position?
Patty Sawyer said:
No one can predict tough times and this season of pandemic was never even in our sights as possible. But tough times always come. If it were not for Profit first and the impact it has had on my business over this last year, I would not be in any position to ride this storm out. Planning for what my business will look like in the future will include what financial measures I should take for longer sustainability. I have not been following Profit first long enough to have adequate reserves for this length of time, but hopefully will in the future. Using my list of “50 ways to Find Cash Today” has been a great fall back getting over a bump in the road and a few bucks in my empty pockets. Finding other longterm revenue streams is more challenging, especially in desperate times. It is easy to be pulled away from your focus and “why”. I thought I had planned well. Now I have to plan better. Always changing to meet the needs is exhausting but I’m learning to enjoy the ride. Thanks Morna!
Thanks for adding your perspective, Patty. I know you are in a better position because of the action you took over the past year.