If the shifting economy has taught business leaders (and consumers alike) anything over these past several years, it’s to plan wisely and invest in the future. Keeping your eyes on marketplace trends, signaling what’s to come in the future, is also a good place to start when it comes to budget planning and saving.
If you’re not a numbers person, then bring in a financial coach who can give you the best advice before you make any concrete decisions. In the meantime, eight Fast Company Executive Board members each offer one step you can take to secure a disaster plan for the next financial crisis.
1. SPEED UP RESPONSE TIME BASED ON MARKET SIGNALS.
Think like futurists to respond more swiftly. Leaders must speed up their response time in a dynamic world by paying attention to signals. For example, the decreasing labor supply and growing workforce diversity are pointing to a future in the next decade where companies will need to absorb higher employee attraction, retention, and turnover costs. Take steps now to protect yourself. – Joseph Santana, Joseph Santana LLC
2. CREATE A ONE-YEAR EMERGENCY FUND AND GET INSURANCE COVERAGE.
A one-year emergency fund and insurance coverage are all you need to run your business smoothly and freely. It’s a precautionary measure that costs a fraction of the benefit. It will give you the freedom to make bold decisions. Investing in insurance and parking one-year funds in a bank is old-school advice and that’s why it works as a perfect disaster backup plan. – Candice Georgiadis, Digital Agency, Inc.
3. PRIORITIZE HOW BEST TO DRIVE REVENUE IN NEW AND CREATIVE WAYS.
The best plan for a disaster is to be prepared for it before it happens. We keep a healthy cash balance at all times to buffer us from downturns. When they come, our first step is to ask ourselves what we need to focus on the most. Usually, that is delighting our customers and driving revenue in new and creative ways. – Ross Overline, Scholars of Finance
4. ANALYZE BUSINESS RISK TOLERANCE.
Analyze your business risk tolerance to seek a balance between innovation in investment and market volatility. This tolerance can be internally enhanced by creating agile teams that quickly adapt to change and are proactive in volatile market conditions. Planning, evaluating, and foreseeing are the core of any prevention plan. – Gergo Vari, Lensa
5. HIRE QUALIFIED FINANCIAL EXPERTS TO ADVISE ON PLANNING, SAVING, AND INVESTING.
My focus is on creating cash reserves to ensure that my employees don’t pay the price should a financial crisis occur. I also ensure that I work with highly qualified financial experts who help with planning, saving, and investing for my business so that we are equipped to deal with a major crisis. I adopt a preventive model inside of a reactive one and you should try to as well. – Syed Balkhi, WPBeginner
6. EXPLORE ALTERNATIVE FINANCING OPTIONS.
I prioritize strategic cash flow management and continue to explore alternative financing options to mitigate any financial risk. Moreover, we foster transparent communication with our stakeholders to ensure everyone remains informed and prepared for any potential impacts. From a personal financial angle, smart diversification of investments and emergency funds serves stability during a crisis. – Dharmesh Acharya, Radixweb
7. BUY INTO THE E-COMMERCE SPACE.
One step I’ve taken is buying into the e-commerce space, specifically into Amazon stores selling everyday items that people need whether in or out of a recession. These are stores that can eventually be sold like any other asset, and allow me to have flexible, almost-passive income that I can save or reinvest elsewhere. – Ryan Carroll, Wealth Assistants
8. CREATE A BUDGET PLAN FOR BUSINESS SHRINKAGE AND GROWTH.
For business, it is important to have budgets and plans for shrinking as well as growth. If a financial crisis or any other external event happens that affects your ability to do business, it is crucial that you have plans in place to deal with it. – Alex Husted, HELPSY