How to Avoid a Financial Crisis

The world is constantly changing and the older I get, the more I realize my businesses and personal life require me working harder and harder to avoid financial crisis.  The following are ways a business can avoid facing a financial crisis:

1. Diversify to Protect Your Assets

Act positively and diversify your business to reduce risk. When it comes to business there is a certain element of risk you have to accept.  But minimizing that risk is critical.  After all, you want to stay in business.  You don’t become a business thinking – I will just last a year.  Most of us create a business to retire on and possibly hand off to our children and/or generations to come.  For me diversifying means investing my funds in multiple resources but also diversifying my work.  If one line of work no longer exists – I rely on the others and create another one as a backup to take its place.

2. Downsize Strategically

Many businesses analyze and review their product lines or service offerings to maintain profitability and survivability.  You want a business that can sustain itself over the long haul.

3. Keep Debt Where You Want It

Debt reduces your profit – simple as that.  If there were to be a financial crisis you want to minimize your debt.  Don’t get me wrong, some debt is necessary and may even be helpful.  But in a time of financial crisis, careful consideration needs to be given to every bit of your debt.

4. Reduce Costs

Reduce cost when you can.  For example when my businesses are doing very well I will help to employ others by working with virtual assistants etc… In a financial crisis unfortunately one of the first things I have to do is reduce my virtual assistants and take on more of the work myself.  Fortunately I have that ability.

5. Spend Wisely 

Do not invest in extravagance.  Plan and strategize in order to spend wisely!