CHIEF FINANCIAL OFFICER OF 'SAY YES TO PROFITS,' OCTAVIA CONNER SAYS BUSINESS OWNERS CAN PROTECT THEMSELVES FROM A POSSIBLE SHUTDOWN IF THEY TAKE THESE STEPS.
A recent report from Harvard Law School and New York University suggested that a second pandemic could come from the United States, and soon. With this sobering assessment comes the natural assumption that a possible shutdown could follow, which was detrimental to the economy in 2020, particularly for small Black business owners.
Although disheartening, financial expert and Chief Financial Officer of Say YES to Profits, Octavia Conner, says this news is the catalyst many businesses need to secure their financial futures in these uncertain times.
She recently shared some of her tips business owners can use to protect their brands from a pending pandemic and a looming recession.
1. Build Reserves
This may sound like common sense, but it goes without saying that in times of uncertainty, it’s best to start saving.
Conner stresses the importance of saving at least six months of operating capital. “Having a financial safety net can provide businesses with the necessary buffer to endure challenging times.”
A few ways to shore up finances is tightening up your invoice auto-management systems so they can go out on time and you can get paid on time. Platforms like Wave Apps, Honey Book and of course, the GOAT FreshBooks can help you set up systems to put your payment retrieval process on autopilot.
2. Diversify Revenue Streams
“To increase resilience, entrepreneurs should strive to have at least four revenue streams,” Conner shares. “Diversification can reduce dependency on a single source and provide stability in a volatile market.”
A few recommended streams experts encourage retaining is earned, interest-bearing, profit income, dividend income, rental income and capital gains.
3. Seek Help
Connor says she has developed techniques and key tips that can help small businesses with financial management support, building workable strategies, and finding effective solutions to revenue-based issues.
Despite what some may think, most of us need a financial advisor regardless of income level to build a solvent financial future—and we shouldn’t always feel as if we need to go it alone.
“We believe that we are superwomen and that we should be able to do everything,” Patricia Stallworth, personal finance expert and author of Minding Your Money: Personal, Money Management and Investment Strategies (BookPartners) told ESSENCE in 2020.
As ESSENCE, previously pointed out ten years ago, the median net worth among Black households was $11,000 compared with $141,900 for Whites, according to a Pew Research Center survey. What’s more, Tamera E. Holmes also writes that Black Americans are underrepresented in the stock market, with 67 percent of African-Americans investing compared with 86 percent of Whites, according to Ariel Investments’ 2015 Black Investor Survey.
This brings us to the next tip.
4. Plan and Strategize
“In times of uncertainty, having a well-thought-out plan is crucial,” Conner emphasizes. “The need for businesses to think ahead and strategize for potential economic changes in the future {is critical for survival}.”
If you haven’t already, review your initial business plan and forecast your finances further ahead based on anticipated shifts. Tapping an expert like Conner, or utilizing business management software like Monday can help support this next step.