Expecting the unexpected might sound like an overused oxymoron but there is slight wisdom in it. There’s a balance to be found between managing your business day-to-day and managing it with one eye constantly on the future. The fact is that unexpected expenses will come up every once in a while and planning and preparation are essential in moments like this.
So, here are some expenses to look out for and a few tips to help you overcome these situations when they occur.
Medical emergency or accident – Sometimes, either yourself or somebody the business relies on can be taken ill or suffer an accident that means they are no longer able to do the job. In the UK, we might have the NHS but if you or your employee are unable to work then you will still be losing money. With the COVID-19 pandemic still running rampant, there are more likely to be staff members and bosses taken ill in the coming months.
Repairs – Things break down and need to be repaired. This could be anything from a necessary piece of office equipment to a fleet of company vehicles or even the plumbing or electrics at the office. Either way, if something breaks down and needs to be repaired or replaced, that constitutes a potentially large unexpected bill.
Shutdown – In the wake of the pandemic more businesses than ever before (particularly those in the hospitality sector) are being forced to close at a moment’s notice if they fall into tier 3 or somebody from the business contracts the virus.
How to manage the unexpected
Build a nest egg – It’s always sensible to have a ‘rainy day fund’ saved away in case the worst happens. We realise this isn’t always possible but if you can have it saved in an account that’s generating interest, even better. This emergency fund will prevent you from having to borrow money or sell company assets to keep the business afloat.
Plan ahead – Easier said than done, perhaps, but as long as you are aware of the expenses that can (and will) pop up from time to time, you’ll be better prepared to handle them. There are various software and online tools that can be used to help with preparation planning in this regard and most are completely free to use.
Secured business loans – In the event that you are stuck with bills that you can’t handle, a secured business loan could save your company. You can secure the loan against existing assets and should be able to get the money through quickly and with interest rates at an all-time low right now, there’s never been a better time to take out a loan. You might not even need a good credit score, though it certainly wouldn’t harm your chances.