Over the last 12 months, we have all seen a number of businesses of all sizes that are no longer in business. There are some I really feel for, but there are many more that went out of business because of bad money management or personal greed.
Recently I was having a discussion with someone regarding Thorntons and how sad it is that they went out of business. I agreed it was so sad that so many people had lost their jobs and this just compounds the issues that have built up over the last 12 months. Without any doubt they would have been instrumental in creating their own demise in the same way as the Arcadia group, and several other large and small businesses have. Most larger business are built to satisfy the owners or the shareholders with no concern to the staff – the people who really make the business tick. A lot of small business owners do not plan for the future, for the “What ifs” that come around from time to time, and they tend to live for today.
Those of you who are the same generation as me will remember our parents telling us to “Put money away for a rainy day”. Strange isn’t it that the older we get, the more intelligent our parents become. Most people generally have a mindset of live for today, and screw tomorrow. I have seen so many small business owners – an area I am really passionate to help and support – who have gone out of business because they ignored that advice. If these last 12 months have taught us anything, its that we need to make sure we have a Rainy day fund, and seriously look at how secure our business is.
Putting money aside for those situations that arise out of the blue is something that is vital for our mental health. Those who didn’t have a rainy day fund were probably more stressed than those who ensured they had money put aside. It should come before buying a newer more expensive car, expensive holiday or moving house. No one says we should not enjoy the trappings of success that running a successful business can offer, but we should look after and nurture our business like we would one of our own children, and not abuse it.
It is one of the most important messages I talk about to business owners I work with. They don’t have to take that advice but if they want their business to survive and thrive, they should do. One thing is for sure – about every 8 to 10 years there will be something that will rock the economy, so the fact we are at the back end of this pandemic would indicate that something will come along in the next decade – it could be sooner – who knows? Putting money away now will make sure you are better prepared when the next rocky period comes along. It is no good waiting for it to happen before you do something about it. The time to act is now.
Many businesses will be looking at their outgoings, and seeing if there are ways they can save money. Again this is something that should be done on a regular basis. If you are one of those business owners who are looking at cutting costs, use some of that money to start your “rainy day” fund.
If you are unsure if you can save money or need help to generate more business, let’s talk. As I am always saying to small businesses owners, “We don’t know who we don’t know and we don’t know what we don’t know. A conversation costs nothing – but well may unearth something.
This article was first published on LinkedIn by Richard Knight on 22/03/2021