As a small business owner, you know that entrepreneurship can be a risky financial choice. During slow months, you might struggle to cope with the stress that this career choice brings. Thankfully, an agency like LiveWebMedia can help you expand your brand’s online presence and boost your revenue in the long run! Furthermore, these tips can help you create a financial safety net for your company by investing in a home warranty plan, keeping your overhead low, and growing your cash reserves.

1. Select a Home Warranty Plan

If you don’t have coverage through a home warranty plan, it’s time to start searching for a policy. This is especially important if you run your business out of your home - but even if you rent a brick-and-mortar space for your operations, having this coverage will protect your personal finances. With a home warranty policy, you can rest assured that you’ll have coverage should your home systems or appliances break down.

Perhaps you’re a recent home buyer, and the seller or your real estate agent did not invest in a home warranty policy for you during the closing process. Don’t worry, you can try this - you’ll still be able to get a policy right after you’ve bought your home!

2. Choose a Business Insurance Policy

Depending on the products and services you offer, you might be required to have business insurance. Therefore, if you are not covered with the required or recommended business insurance policy yet, start researching your options. Harrah & Associates states that you may need business property insurance, general liability insurance, or workers’ compensation. Policies like these can help you cover potential income loss from property damage, lawsuits, and other issues.

3. Build a Cash Reserve

Just like you need an emergency fund to tap into for personal expenses, you should save up a solid cash reserve for your business. But how much money should you set aside for a rainy day? Lendio recommends having enough cash on hand to sustain your business through a situation in which you would have to completely shut down operations for three to six months.

4. Minimize Your Overhead

It’s important to consistently assess your business expenses. By carefully going over your budget on a monthly basis, you can determine whether or not certain expenses are actually delivering a return on investment. If you’re able to run your business efficiently and provide top-notch customer service with low overhead costs, you’ll be able to invest more of your revenue back into growing your business. To cut back on your overhead costs, Stampli recommends going paperless, re-evaluating your utility providers to see if you could get better deals elsewhere, and even renting a cheaper office space. It’s also important to focus on paying down debt.

5. Take Out a Business Line of Credit

A business line of credit can help you pay for unexpected costs in a pinch. However, in order to get access to a business line of credit, you’ll have to meet certain qualifications. Generally, you’ll have to register your company as a specific business entity. You will also need good credit and a personal guarantee, and you’ll need to prove that you’re bringing in a certain minimum monthly or annual revenue. Furthermore, some lenders will only offer business lines of credit to companies that have been in operation for at least two years.

It might seem like financial instability is inescapable if you’re an entrepreneur. While slow periods are unavoidable, building a strong financial safety net will bring you peace of mind. By getting coverage with a home warranty policy, contributing to your cash reserves, and applying for a business line of credit, you can put your company in a safer financial position.

Need guidance as you build your company’s brand online? LiveWebMedia is here for you! Fill out the contact form on our website today to learn more about our services.