At this point you've probably gone through the spectrum of emotions with what's going on in the world right now.
My inbox has been circulating with questions over the past couple of weeks.
What should we do to prepare?
What if my revenue continues to drop?
Should we stop setting aside profit to help with a dip in cash flow?
Regardless of your opinions on what's going on with the Coronavirus, the fact remains that things are still changing. It's best to be proactive when it comes to our business and avoid panicking.
There isn't a cookie cutter answer for what you should do to prepare. Each situation is different and should be approached that way. While your business may be less susceptible to the consequences of the Coronavirus, your clients' businesses may be at risk.
If you're actively using Profit First, you're already light years ahead and have more financial protected than your entrepreneur peers. Your operating expenses are at a healthy percentage and you're already setting aside profit consistently.
If you want to better prepare yourself, there are steps you can take.
One thing you can do is open another account and label it "Contingency." Set a percentage of your revenue into this account in preparation for continued downturn in the coming weeks or months.
As you take your profit distributions, if your business is at high risk of dropping in revenue, consider putting the profit into the contingency account until the storm passes. Then take your distribution as you normally would.
At the end of the day you must decide what is best for you and your business. If you need help deciding what to do to financially prepare, I'm offering a free coaching session while this is going on. Click here to schedule a time with me.
Craig is a Certified Profit First Professional in Austin, TX who is passionate about helping service based businesses become permanently profitable.