Financial Preparedness for Business Owners: How to Build a Resilient Business

Just as much as the idea, drive, passion are all essential ingredients to starting and growing a business, money is as well. 

Money is an important pillar, like the oil to an engine, which helps you get started and most importantly helps you keep it going efficiently. It becomes very important to manage this resource well as it can also take your business down!

Well, so talking about financially preparing your business here I want to talk about - Capital. Capital, also known as initial funding, is a sum of money necessary to start a business, or launch a new product/project within an established business. 

A brief overview on capital – Make sure you calculate every penny that’s needed to get started. Make a list of all the equipment, registrations, courses, furniture - No sum is small, put everything on the list so you know you are well prepared.

But that’s not what I am going to talk about here, I am talking beyond that sum of money. 

We often underestimate the fact that any business/project/product takes time to generate sales, let alone making regular and enough sales to make consistent profits. What can you do to allow your business to grow steadily and sustainably? - introduce financial resilience. How’s that? -  While you prepare for the initial funding, also prepare for a sum equal to an estimated monthly expenses needed to consistently run your business for at least a year. 

This way you are not relying on those profits to run your business from the first month post launch, you are making your business financially resilient and encouraging sustainable growth.

Why Financial Preparedness Matters for Small Businesses in the UK?

• You are giving time to your business to grow

• You are also giving yourself time to adapt as a business owner

• Your business is going to undergo a lot of changes in the first year. By being financially resilient, you allow space for those changes rather than approaching everything with rigidity

• Finally, you carry on doing what you love with peace rather than stressing yourself out, because your finances are sorted!

Now, there are many sources to fund that initial sum of money:

• Bank loan

• Grant

• Charity

• Other financial institutions supporting businesses with loans

• Your own savings

Rather than talking about which source is the best you should opt for, I would like to highlight how and why you choose one:

• Can your business bear an additional monthly cost of loan repayment?

• Would you rather appreciate flexibility in repayment?

• Do you qualify for charity loans and other financial institutions?

• Do you have access to savings that you can utilise without any cost or burden in the future?

• If you are an established business planning for a new launch, the ideal scenario would be to have calculated this sum months before the launch and save for it before making the dive. 

Being financially resilient is certainly a superpower – it allows you to focus on more important aspects of life without guilt and with confidence. 

And its financial literacy that enables you to achieve this level of confidence and peace of mind. 

Access free resources here, to start your journey towards financial literacy - Free Finance Resources for UK Business Owners | Budget & Profit Tools

And if you are ready to take your financial confidence to the next level, 121 coaching is something I offer as well - 1-on-1 Business Finance Coaching UK | Reduce Expenses & Boost Revenue

Written by
Mrudula Muralidharan
Founder and Finance Coach
Million goals