MBA910 Q&A Wednesday: What do you do when you run out of cash?

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Heyo. Welcome to the $100 daily business goodness in your ears with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the hundred dollar MBA, a complete business training and community online over at100mba.net if you're just getting started and you want to nail your business idea, you want to make sure that people actually buy what you're offering, then you got to check out our free course on Idea validation. It's a seven part video course that's absolutely free, but it's going to make sure you you're selling something that the market wants. Head on over to 100 MBA net to enroll in this free course today. Today is Q and A Wednesday. That means I'm answering your question right here on the show. Yes. So if you have a question you want answered, you could just send it right to me@omar00mba.net and I'll answer it right here on Q and A Wednesdays. Today's question is from Joan and Joan asks, what do you do when you run out of money for your business? A great question because not a lot of people will ask this question, let alone answer it. But I will. In today's episode, I'll talk about how to plan for this, how to make sure you know what to do first, what to cut, what not to cut, and how to bounce back and get into a place that you're financially secure in your business. All that coming up next. Let's get into it. Let's get down to business. So the question is, what do you do when you run out of cash? First of all, this is very common. Not a lot of people talk about this, but with business there's a lot of expenses. Money comes out really quick and often the money doesn't come in. And that's where I want to start. You got to reverse this process. When you get into the state where it's like, man, I'm running out of cash. I don't have enough money to run this. Business versus process mean that you're spending less than you're making. Make sure you're making more. Right? So the first thing I would is I take a look at all your expenses. Look at your expenses. You should have a spreadsheet with everything that you spend on every single month. Whether that's rent for an office, whether that's employees, whether it's services that you use for your business. Take a look at everything. And I want you to get really brutal. And I want you to highlight the things that you absolutely have to have in order for you to run this business, to stay in business. And those are things like website hosting, server costs, you know, the key players in your team. Maybe you need to make sure that they're being paid right, but you gotta be brutal. If you're paying an office expense and you're running out of cash and you're about to go out of business and you're not a physical business where you actually sell to customers physically in a store, you run your business online, but have a physical office, you can cut that expense out. In fact, we've done that before. Why? Because you can work from home and so can your employees and they won't mind. And that's better than going out of business. That's a huge expense that you can cut out completely. Talking about employees, you might have some freelance employees on your team that do work that really don't affect the actual business and maintaining the business to stay alive. That could be a marketing team, that could be a design team. So if you could put those positions on pause for the moment, that would save you a lot of expenses. What I'm trying to do here is slow down the bleeding. So if you're running out of cash or you run out of cash, you need cash coming in, you need some sales. And this is the time to make money, not spend money. So you're going to have to start thinking about how you can make money. Whether it's running a promotion for your products and services, whether it's introducing a new service, whether it's personal coaching or consulting that you can earn. Right now, we can email your list and say, hey, I'm opening up a coaching program. It's going to be X amount of weeks. This is the cost. You can start making money right now. Whether it's phoning up your best clients and finding out if you can renew your contracts early or you can actually sign them up for a new contract or a new project. These are things you need to really think about to make sure you're making an influx in sales to cover the fact that you've run out of money. Now I chuckle a bit. It's not a great situation to be in, but ideally you want to make sure that you do these things. Before you get to the point where you have zero cash, you got to take a look at the trend of your expenses and your finances. If things are going down, down, down, you got to start cutting before it's too late. The next thing is look at your services, find out if you can negotiate some better deals. Often if you've been a customer of a service of a company for a long time and you tell them, hey, I'm in a financial sit or I need a discount, where I need to have a discount to continue working with you, they will negotiate with you to keep you on board. This includes website hosting or server costs or even an email marketing service provider. They might even maybe give you a lower tiered pricing temporarily and then bring you back at some other point at the higher price. This will help. Remember, when you run out of cash, it's almost like do or die. You know, it is do or die. You're going to lose your business or you're going to have to close down if you don't do some drastic measures. So these are drastic measures because it's drastic times. One thing I really want to impress upon you is that in these times, do not give up, do not get depressed, don't feel down about the situation. You can bounce back from this and you can get better and you can be back on your feet very soon. But by being depressed and down and feeling sorry for yourself, you're not going to help the situation. It's not going to help you actually bounce back and be in a better financial situation. What you need to do is get busy working, get busy selling, get busy making some money to recoup this loss. I've been in situations like this and all I thought about and all I focused on is how can I make more money, how can I cut my expenses down, how can I improve things? And I just worked towards that and I just put the blinders on until I was out of that rough patch. Now once you've been through a rough patch like this financially a couple times, it's a huge reminder and you do everything you can in your power. Never to go back to that place. So remind yourself once you're in a good financial situation to take precaution on your expenses. Make sure you're not spending too much money. Another tip is once you're in a good financial situation, you're stable again. It's worth hiring an accountant. You can hire an accountant for as low as like $300, $400 a month and they could take a look at your books and see your expenses and make sure that you're spending your money the right way. They're also going to make sure that you're not spending too much money and they're going to see if they can get you some breaks when it comes to taxes or maybe some rebates or some sort of incentives for small businesses in your state, country, whatever. So it's a small investment that's really going to help you in the long run.

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To wrap up today's Q and A Wednesday, running out of cash is stressful. I'm just going to say straight up it is. But you got to focus on solution. Being stressed out, being depressed, feeling sorry for yourself again is not the way to go. Cut your expenses. Be brutal as possible. Obviously, when it comes to your staff, you want to be as sensitive as possible. Make sure you don't cut as much as you can. If there's somebody you can pause for a while, you can pause them. Things like office space, perks, lunches, things like that, Cut those out immediately. Start focusing on revenue, how you can make more money, how you can make as much money as possible this month. Can you introduce new products, new services? Reach out to existing clients, your best clients. See if you can renew their contracts or projects. You could do this. You can get out of this. I hope this helps you. Joan. My apologies if I was very direct and honest But I want to make sure that I help you with that honest advice. If you're listening and you have a question about business, about how to run your business, how to maintain your business, how to improve your business, how to get started even, submit your question over@omar mba.net and we'll answer it here on Q and A Wednesdays. Thank you so much for listening to the show. Make sure you hit subscribe and leave us a rating and review on itunes. When you leave us a review, you enter our weekly random draw to win a free ride to one of our courses. This week we're giving away a free course called Easy course. It's worth $500 over at EasyCourse co, but we're giving it away to somebody who left us a rating and review. It's our way to say thank you for showing your support for the show. So go ahead, head on to itunes, give us a rating and review. Tell us what your favorite episode is, what you love about the show. We want to hear from you. We read every single review. All right, that's it for me today, guys. But before I go, I want to leave you with this. Money problems can be extremely stressful. Lack of money is no picnic. And a lot of us, we get into business and we're not so good with money. We never learned it in school. So sometimes you have to learn the hard way through these experiences. When you're in financial trouble, don't feel bad. Recoup, bounce back and learn from the experience and make sure you prevent that from happening again. This is temporary. You can get over it. Take on the advice that I offer today and turn it around. All right, I'll check you in tomorrow's episode where we talk about how to keep things simple in your business. In my experience, when things got complicated and it got worse for me, not only for me, but for the team, for the business, for sales. Keeping your business simple makes your life simple and makes things better. And we'll talk about how to do that in tomorrow's episode. Make sure you see us. Then make sure you hit subscribe and I'll check you. Then. Take care.

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