What To Do When Your Expenses Are More Than Your Income
Most home business owners will have months where their income isn’t so great. It’s a part of growing your business. The problem comes when your income isn’t enough to meet your expenses for the month. Suddenly you’ve got trouble. What can you do?
The first thing you can look at is where you can cut back. How much of this you need to do depends on how often you aren’t meeting expenses and by how much.
If it’s just by a little and not too often, you can probably make it up next month without too many worries. Just don’t rely on those credit cards too much, as the interest adds up rapidly.
Figure out where you can cut back by writing out all of your expenses, both personal and professional. This list will give you a visual reference to see what you don’t need to spend money on while your income is down. Some of the little things, such as eating an occasional meal out, can be cut with little trouble.
Business expenses are more challenging. Some things you cannot cut without seriously damaging or destroying your business. Other things are a help, but depending on how your business is doing, you may need to cut them for a time. This may include tools that make your life a bit easier but require a monthly subscription, services you use, or freelancers you’ve hired. If you don’t have the money at the time, you may need to quit using them until things pick up.
This is a classic problem for any business, as it’s easier to make money with all the right tools. You’re more productive with the right kind of help, and cutting back can slow down your recovery. Think carefully and decide if the cuts are the right ones to make, or if you need to find a better way to handle your money flow problems.
Look around for free options for things you pay for now. They won’t always be there, but there are amazing things available online for free. You may lose some features, but so long as you can get the most important features for free, the switch can be worthwhile. That won’t be true every time, so think carefully before you make the switch.
Yeah, this one’s obvious. If you aren’t earning enough, you need to start earning more. Easy to say, hard to put into practice.
Sometimes you can do it. It may mean taking focus away from your core business for a time, but you may be able to do it.
You can write articles for other people, for example. You can offer something that takes minimal effort for you to do on sites such as Fiverr… very minimal effort, as the pay is minimal. Find some sort of freelance work you can handle for a time, ideally work that won’t take all of your available work time, so you can still run your business.
If you have anything you can sell, that’s another way to bring in some quick money when you really need it. Selling excess stuff you own also helps get rid of the clutter around the house.
Work extra hours on your core business if at all possible. This is where you want your income to be coming from in the long run. All the things you do to get some quick money so that you can survive can be dropped once you have your core business where you need it to be. It’s hard work, but if you’ve chosen your business well, it will be worth it in the long run.
Taking on a side gig is another possibility. Food and grocery delivery are in high demand in many areas, and there are a number of companies to consider.
Other side gigs can be done at home. There are many flexible remote jobs that you can work around the rest of your schedule.
Is It Time To Give Up?
Sadly, sometimes it is time to give up on your home business. Not every business succeeds.
Take an honest look at what’s happening with your business. Are you seeing growth? Can you see how your business will eventually be worth the expenses? Is it still a business you’re proud to run?
Just because business is going poorly doesn’t necessarily mean it’s time to give up on your home business. Most businesses are not overnight successes.
You may have to consider the dreaded job. It’s not pretty, but sometimes to make your business work you have to deal with a regular job for a time. Make sure the job pays enough to be worth the added expenses you may face, such as childcare if you have children. Not all jobs are worth it.
The wonderful part about most home businesses is that you have the flexibility to continue working on it even if you have a regular job. You don’t have to give up unless you’ve found that it’s not worth it to you.
What’s most important is to recognize when you need more income, and what you have to do to earn it. Ruining your finances in the hopes of business success isn’t a good plan. Take the steps necessary to keep yourself financially afloat.