(This is a contributed post)
There can be a lot of costs that get overlooked when you’re running a business. You’ve got a company on your hands, probably brand new and fledgling, and you’re mainly worried about getting your profits margin up and running. But a good business plan covers all aspects of the business lifestyle, and as a result, a good portion of your finances should go towards handling emergencies.
They’re an unknown risk, and we can never predict when an emergency will occur, so we can only prepare for one. And because of this, you should probably do a bit of rearranging with your current budget. So with that in mind, here’s how you can successfully budget for a company emergency, and barely notice a change in your assets.
Check your stats, and see where you can cut the fat. (Source)
Consider What You’ll Have to Shill Out for
When it comes to preparing for an emergency, you need to know which ones are likely to happen to your business, no matter how unknown the risk actually is. And when it comes to matters like this, just sitting down and writing out all of the emergencies is a great way to put your plan in motion!
Usually, electrical matters are going to be at the top of your list. You’ve got an office, where your main business dealings occur, and many electrical items live there. Be sure to note down that you’ll need a commercial electrician on your side, and see if you can strike up a deal with a company local to you. After all, there could be an electrical fire, there could be a power cut, there could be a lost wifi connection, and there could even be someone just tripping over a wire on the floor and disconnecting the entire business network!
Build Your Fund Up Every Month
This is going to be the easiest and most manageable way to try and start an emergency fund. So once you’ve made your list, and checked it twice, only then can you start considering the budget you’re going to need to cover these kind of expenses. At first, you’re not going to need something extensive – you’ve got insurance, and you’ve got a no claims section of the policy on your side, but you’re still going to need something there to catch you when you fall.
It’s also a good idea to build an emergency fund to make sure you can cover any costs during times when you’re making reduced profit and have low sales. Calculate how much you spend each month, and then determine what you’re going to need to put away alongside this to make sure you can cover prices like these during emergency times. Try to get at least 6 months saving under your belt before giving your company a rest.
Budgeting for an emergency doesn’t have to take too much out of you, so be sure to start early to avoid crushing disappointment later on. This is your business’ future.