I’m not really going to answer this question. There are too many variables. I can say that since loans are being peddled like crazy, it can be easy to miss some other important financial principles.
Preparing for a crisis – A lot of people will say that we never could’ve predicted something like this. While that might be true, we do know that history repeats itself. This isn’t the first crisis and it won’t be the last. The magnitude won’t always be the same but the good book says that in this life, we will have trouble.
I am in no way saying this to make anyone feel guilty. It’s just that it’s easy to get so caught up in everything that’s going on and miss the lesson. We need to be as prepared as possible for when tough times come. The businesses who are already leveraged right now will be in the most trouble. The ones who have a nice cash cushion will be in the best shape.
Slow Down – I think we all have a part of us that wants things fast. We want the big gym that brings in millions. We want to tell people how many clients we have and how many staff members we have. This can come at a cost. Growing slowly (without a bunch of high risk debt) is the way to go for most.
Debt should be a last resort – There is something else that should come way before borrowing money that you have to pay back. This is the time to be on top of your expenses. Before taking a loan, cut expenses that you don’t need or aren’t serving you well right now. Be sure to hold onto your smart expenses. Two of the smartest expenses for me are personal growth and development as well as marketing for new business.
Additionally, one of the best things you can do for your business finances is tighten up your personal plan. What kinds of subscriptions or other non-essential personal budget items can you free up to help your business survive?
Just like you, I want to protect what I have and take care of my current clients and team. With that said, I think it would be a shame if we didn’t learn from this.
What can you learn about yourself and/or your business as a result of going through this?