Saving For a Rainy Day - The Small Business Umbrella Model
By Wendy Oliveras on Wednesday, December 30 2009
When it comes to learning hard lessons about life in general, it can be easy to get distracted and ignore the obvious implications and most important consequences thereof. For every mistake we make, we have to not only learn a lesson, but we are forced to face the relevant circumstances. This notion is not only true with regard to our personal lives, but more so the professional and business aspects of our lives as well.
Since we are at the end of 2009, I sit here and reflect on what has transpired in the last year and a half with respect to our economy and how the downturn has affected businesses of all sizes and industries. For purposes of this article, however, my focus is on the small business and how every business owner should implement what I like to refer to as “the small business umbrella model.” It is critical to understand and appreciate that “saving for a rainy day” really means if you over spend and do not have sufficient monies in the bank to cover all of your expenses, you will suffer immeasurable financial hardship. The key is to recognize what is necessary in your spending and what is not. Having champagne taste on a beer budget will not help you or your business to prosper or survive when an emergency occurs.
It is a fact that small businesses seem to profit during hard economic times. However, the hard lessons learned from the mistake of not having a 6-12 month savings in the bank, such as claiming bankruptcy or becoming insolvent, can be seen in the number of small businesses that have gone under since mid-2008. So, what should a small business owner do?
My best recommendation, and as per my own experience as a small business owner, is to make sure you put aside at least a 12 month cushion, which covers all of your personal and business expenses. This way, if there are any unforeseen situations or economic disasters like the one our nation is still trying to crawl out of, you will be ready. Remember although the sun might be shining today always have an umbrella just in case it rains without warning.
Wendy Oliveras is a columnist, author, search consultant, and career planning and development advisor. She can be reached at either (201) 947-6662 or via email wo@oliverascoinc.com. Please also visit her at http://www.twitter.com/wendyoliveras or http://www.linkedin/in/wendyoliveras or http://www.oliverascoinc.com.
To view Wendy’s previous articles, please visit http://www.examiner.com/x-22670-NY-Search-Consultant-Examiner.
