A crisis is a term used to mean a state of collapse of functional systems. As of December of 2020, almost every level of business had been affected by the Corona Pandemic. The Pandemic is a crisis that all of us well know and have been affected by it. No single person on earth had planned for such though many may have planned for emergencies. What can we do to make sure that we survive such or worse situations in the future? Our finances contribute the biggest share in achieving goals we have. Yet we all predict occurrence of emergencies but they are similar situations to those that we have heard of or met before.
Onestopinfos has gathered some few financial tricks that would greatly help us survive any unforeseen occurrences financially.
2. RUN BUSINESS AT OPTIMAL LEVEL
If you have a company or a business you may have realized that most companies stretch their risk appetite so much so that they barely put aside anything as provision for unforeseen collapse of systems. It is as though they bite enough to leave no space for any flexibility. The earnings of such companies are so strained that in case of a small change in market or government policies, they would be at the edge of being repossessed.
Business can be operated at different levels. When business is ran at a level above optimum, expenses are reasonably fair to the business and returns are increased. Many managers of companies are unable to grasp that new markets will always e there but the capacity of the company to deal with new markets will not always be there. Exhausting markets in sections that match to the growth of the company is the safest way of approaching risk when taking up credit. Operating Business at optimal level means that the activities are done at such a level that the business easily deals with its expenses and creates a buffer that would cushion the business from shock. Most of the existing businesses have suffered greatly from the pandemic. The Hospitality Industry has almost closed entirely in some areas where declaration of lock down was issued.
3. REDUCE WAGE BILL TO A SUSTAINABLE LEVEL
When duties are allocated in such a way that time is spent properly in a company, the cost of salaries and wages is reduced. To avoid wastage of funds, all companies should consider reducing departments to the most crucial departments for production and management. The cost of salaries and wages is always the most crucial expense in a business. You may have noticed that when someone holding a respected position in a company takes a leave or is fired, the company still goes on to operate as usual. The company lays off employees in tough times to reduce wage bill when sales decrease.
4. AVOID RIGIDITY
The word is dynamic and keeps shifting from one area of interest to the other. Accepting change will help you adapt to the system and make changes in activities to fit the demand. Industries like hospitality and tourism were very profitable before the pandemic, people no longer want to tour the world. Business has shifted to all activities you do for money all serve to help you gather some basic needs like food, shelter and clothing.
5. EXHAUST ALL YOUR SKILLS
Many Engineers make good accountants, this shows that we have ability to fit in more than one departments in a company. You could be a good cook, pastry maker, baker or cleaner. Using all your skills to earn will increase income. Being rigid will make it unbearable to adapt to change. Lowering your operations to meet your reduced income level.