It’s inevitable to stumble onto big troubles when you’re running a business. The worst part is when you had to spend your spare resources to contain the damages. It’s never going to help especially when you only have enough funds for the business itself.
With that in mind, having emergency funds to finance sudden troubles is essential. You just have to keep in mind that you’re not supposed to use them unless urgently needed. Having emergency funds that you can access in times of difficulties is a must.
But how are you going to reduce the risk of using these funds? Are there preemptive ways to do this? Take a look at the following tips. Apply these ideas to preserve your revenue for business necessities:
Take inventories seriously
Part of business planning is executing inventories properly. Accounting everything in your business is crucial. From goods and items you manufacture down to materials you sell, everything should be accounted for. You don’t want to be too lenient only to be taken advantage of. Untrustworthy people may take some of your goods without you noticing.
A comprehensive inventory process is an answer to avoid this kind of trouble. If you fail in handling inventory, your business would be at risk of revenue loss. Don’t ignore this process. It’s the key to easier monitoring of your business assets.
Hire trustworthy people
People with suspicious backgrounds should not have any place in your business. According to an article, businesses lose 5% of their revenue due to employee fraud yearly. That could be a small figure. But if you continue losing that amount annually, it can accumulate and you’ll end up losing more. That’s why it’s important to recruit people who you can truly trust.
Hiring employees you already know can be a viable option. But of course, you don’t know everyone. In this case, your hiring process should be done carefully. A comprehensive background check for each applicant is the way to go. This process is the best way to filter eligible applicants from the ones who have sketchy backgrounds. This way, you’ll have peace of mind by entrusting your business operations to the right people.
Make your business place sustainable
Recurring damages in your business place can result in endless repairs. This isn’t so great especially if you find yourself spending a ton of your revenue. To make the matter much worse, you could be spending some funds that should be allotted solely for emergencies. Don’t wait for your business place to collapse from poor maintenance. Make it sustainable and not susceptible to damages.
You can do this by regular maintenance of everything. From your HVAC systems down to your flooring, everything should be well managed. If you’re still building your business place, let the contractors know that you want to use hard-wearing materials. Check out the most durable brick slips out there.
Opt for hardscapes that can stand the test of time. Use flooring that doesn’t easily degrade. There are tons of ways to make your business place sustainable. Prevent yourself from spending your emergency funds on damage repairs.
Provide quality service
Giving quality service to clients is the main goal in the first place. If you stay sincere to this pledge, you’d gain more customers and revenue. There’s another advantage of staying true to providing a satisfactory service. It’s avoiding refunds and returns. Did you know retailers lose 1/3 of their revenue because of these? That’s according to research by a retail analyst cited in Vogue Business.
Poor service can lead to refunds or item returns by customers. If this happens to the point that it affects your production expenses, you could be using your emergency funds next. That’s what you want to avoid at all costs. You can avoid this if you’re providing the best service to your clients from the start.
Get your assets insured
There are times that tragic instances may occur in your business. These can incur property damages and asset loss. Damages to your business properties are going to cost you a lot. The same goes for loss of physical assets. If your business assets are not insured, chances are you’re going to end up spending some of your emergency funds. This will not only cost you much, but it’ll also make you spend funds reserved for the rainy days.
Prevent this from happening. Shop for insurance policies that best fit your business model. Get your business properties insured and protected. Do this so you can avoid touching funds that are only meant for more serious matters.
Earning more is what you’re aiming for when you start a business. It takes skills to know which actions to take in case of a business crisis. That’s why it’s better to prevent these instances to happen. If they’re unavoidable, prepare for them. Follow the tips above to save your business revenue and spare your emergency funds.