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How to manage financial stress
30 April 2024

The 13th – 19th May is mental health week and we understand that financial concerns can cause anxiety, depression, and other mental health issues.

We know that running a business can feel like a constant balancing act. From worrying about cash flow, economic shifts, keeping operation costs in check, chasing late payments, the ever-changing regulatory requirements and trying to keep your team happy, it definitely keeps us on our toes!

The constant worry can lead to lack of sleep, put pressure of relationships and affect our well-being. It is important to recognise the impact that financial stress can have on our mental health and to seek support when needed. We believe by staying proactive, some careful planning and effective decision making, you can get through these worries and keep your business on the right path.

Although this can be stressful, here are some steps you can take to minimise the impact on your mental health.

Monitor cash flow

Monitoring your cash flow can help identify potential problems before they become critical. We would suggest monitoring your cash flow regularly to ensure you have enough funds to cover your expenses such as payroll, rent, utilities etc. By keeping a close eye on your cash flow, forecasting future needs, and ensuring timely payments from customers, you can keep your business running smoothly. Being proactive about managing your cash flow not only protects your business but also sets you up for long-term success.

Create a budget

Establishing a budget allows you to track your income and expenses, prioritise your spending and identify areas when you can save money. Knowing where your money is going can help alleviate anxiety about your finances.

Create a detailed business plan

As well as having a budget, we would suggest developing a comprehensive business plan that outlines your goals, objectives, target market, competition and financial projections. Having a clear roadmap can help you make informed decisions and anticipate potential challenges.

Stay Flexible and Adapt

Although we suggest having a budget and business plan, you need to be prepared to adapt your business strategies and operations in response to economic trends, changes in regulations, changing market conditions and customer preferences etc. Flexibility and agility are key to navigating uncertain times and avoiding financial stress in business.

Have an emergency fund

Setting aside money each month in a separate account to cover any unexpected expenses can reduce stress associated with cash flow shortages and provide peace of mind during challenging times.

Control costs

Whilst we can’t control the economy or changes to regulations, we can control our own financial habits and decisions. Regularly review your expenses and look for ways to reduce costs without sacrificing quality or efficiency. Negotiate with suppliers, streamline processes, and eliminate unnecessary expenses to improve profitability and cash flow.

Maintain accurate financial records

Keeping accurate and up-to-date financial records to track income, expenses, assets and liabilities is a must. We suggest using accounting software, like Xero, or hiring a professional to ensure that your financial records are organised, accurate and up to date.

Manage debt

Debt is a common financing tool for businesses, but it can also be a source of financial stress. To manage this effectively, we suggest you establish a clear plan for paying it off, negotiating payment terms with creditors and seeking professional help if necessary.

Seek help

Remember that is it’s okay to ask for help if you’re feeling overwhelmed by financial stress. At Your Support Team we understand that every business is different and we invest the time and effort to get to know the ins and outs of your accounts. We have the expertise and knowledge to give you well informed advice and always have your best interests in mind. We work with you to give you the best information and support to help grow your business and reduce stress.

Whilst the above strategies can help avoid some of the financial stress, it’s important to remember that running a business is stressful and that financial stress is a common issue. You may find it helps to discuss your concerns with a trusted family member or friend so that they can provide emotional support and perspective. Also, we suggest engaging in activities that promote mental and emotional well being such as exercise, hobbies, meditation, spending time with loved ones and creating a work- life balance.

If we can be of any assistance, please give us a call or why not pop in for a brew 😊