Budgeting Tips for 2020
5 Business Budgeting Tips for 2020
As we kick off another year, business owners find themselves wondering what’s in store for 2020. Whilst the economy is currently strong, the landscape could change as the threat of global recession and political upheaval loom. Here’s how you can safeguard your business for the coming year.
- Get your financing in place now
If you are considering applying for loans or other forms of credit for your business, do so when you are in a stronger position. Applying when you are in a difficult financial situation can be unwise and can land you in debt that is difficult to pay off. Lenders are much more likely to give you financial help or credit if you are able to show healthy accounts. You are likely to get a much better deal too, with lower interest rates and more favourable terms.
- Make your outgoings flexible
Long term financial commitments for things like software and vehicles can end up being a burden if the economy takes a downturn. Whilst some fixed costs can’t be avoided, Forbes suggests that seeking to make your outgoings more flexible is a sensible way to help you sail through difficult times. For new enterprises, this could mean renting shared office space as opposed to signing long-term leases that are costly and rigid.
- Focus on your ROI
Essentially this should be a major objective for any business, but it’s even more of a priority when you could be facing difficult times. Taking a big financial risk to acquire new leads may not be advisable unless you have some certainty it will work, but focusing on the tried and tested methods that you know bring in the sales is a safe way to sustain your ROI. A stronger financial position and a stable economy are better conditions for taking risk. That said sometimes risks really pay off so use your judgment wisely.
- Have an emergency fund
A business will always face unexpected costs but 2020 is looking like it could be a year where businesses may face higher than average unforeseen financial burdens like lower consumer spending, tariff problems and even things like cyber-attacks. Small businesses are much more likely to feel the effects of these issues and may not be able to trade without an emergency fund to back them up. Have a fund ready to deploy should you need it and avoid dipping into it unless it really is an emergency.
- Get an Accountant
It seems like an obvious one, but an Accountant or Financial Advisor will give you the very best advice on what you need to do to keep your business as healthy as possible. They may suggest ideas you’d not considered or recommend ways to avoid certain pitfalls. An Accountant is one of the best investments you can make as it gives your business the best chance at creating and maintaining a successful enterprise.
So, there we have it, 5 tips for futureproofing your business across 2020. The landscape may be uncertain, but there is some certainty in knowing that you are giving your organisation the best chance at succeeding.