by John Savage, Author, CFHC
Loss of a Business
Some people have had to close their business due to high overhead and loss of revenues. I saw more of this during and after the pandemic. Building and scaling a business is not often easy and takes a significant amount of time, effort, and resources for most business owners. More than half of those who start a business struggle to keep it going and have to close their doors in just the first 12 months. Other businesses such as grocery stores and restaurants can often take anywhere from 2 -5 years before they really start seeing any significant profit margins due to the amount of resources, equipment cost, and manpower it takes to cook, clean, service, and maintain such a business 6 -7 days a week and often the owners must work 7 days a week.
America's built off the backs, tears, and sweat equity of diligent, honest, hardworking individuals across the country. I believe every entrepreneur should be honored and compensated well once they get a business off the ground that supports, improves the lives of others, and gives back to the broader community through the many helpful products and services they make available to others that can really benefit from them. Many people who work also run a successful business full-time and part-time. They use a portion of the revenue they earn as income, to invest back into their business, and help them lower their tax liability at the end of year.
When a business fails, has to scale back, or cost increasing faster than revenue can be generated, this can began to degrade the ability of a person to maintain the monthly expenses such as rent, mortgage, food, gas, utilities, childcare expenses, and more. Regardless of what it is, it is important to help those running a business to find resources, identify ways to cut cost without compromising productive business activities, so they can continue growing their business and generating revenue. Below are some challenges that business owners need help with.
How do we cut cost to keep my business going? – this is often a challenge that many businesses are always seeking to control, some ways of doing this is by targeting the right business activities which take time sit down and assess what are the keys areas in the accounting that seem to be excessive, out of balance, etc.
What activities should I be focused on to grow my business? – To answer this questions sometimes takes brainstorming and focusing your business on the activities that are in line with your mission. There are many aspects to these questions because many businesses have great ideas, and they have the right leader and team, but they may be focused on the wrong business activities or products they think their customer’s needs. A brainstorming session, business needs assessment, and assessment of current business activities all need to be evaluated to determine what is best for your business.
Needing Additional Funding - often business such as grocery stores, builders, manufacturers, restaurants, and even lenders often need a line of credit to help them fund all their business activities until they can start turning enough profits and accumulating assets to the point where they become more self-sustaining.
Divorce – this is an area where I find a lot of people either are amicable or things can become very contentious depending on a person’s mindset, emotions, and the root cause of the reason free divorce in the first place. I have had a few cases in which someone was taken advantage of, usually then men, marrying someone from outside of America and once their spouse came here and got their green card, the starting using credit, budling income or a business and once they were financially sound, they left the man to start a new life. These are tough situations because the other spouse was caught off guard and completely blind-sided. Divorce and break-ups can be devastating for many, especially if one spouse is not the high income early and now left with how to make up for the short fall in monthly income. If an attorney in involved, I have found this to put quite many individuals I have spoken with into financial handcuffs because they are now stuck with an attorney’s bill within some cases interest added on into the thousands. The person is still feeling the affects on their credit, their monthly budget, and barely making ends meet. This does not include alimony and child support that may be taken out of their check automatically every month regardless of what financial bondage this can put the other person in.
The laws are not always fair and balanced from one person to the next so having a coach who can walk with you, help you strategize long-term, and connect you to the right resources is vitally important and absolute necessary from your mentally well being as well as your financial well-being. With things like childcare, health care coverage, selling a property or a business to divide up assets and to pay another spouse off, can be overwhelming and have tax ramifications as well which is where you would need to be referred to a tax expert to help you how you can be affected as you move forward with your life.