I came across this funny analogy on a novelty coffee mug, making light of the events of 2020. EBITDA is a financial term used to analyze and compare profitability among companies and industries, as it eliminates the effects of financing and capital expenditures. Adding on B and C, I thought was very fitting.
The effects of bushfires and coronavirus in 2020 has stripped some businesses of bottom line profits in 2020 and many small and micro business owners are feeling the pinch. Loss of customers and a reduction in sales, but the bills just keep coming. Government stimulus kept many going for a while, but once October 2020 came around, much of the Jobkeeper and Cashflow Boost payments ceased, but the bills just keep coming.
Sometimes in business it can seem like we are on the merry go round of same shit different day. A rollercoaster ride of emotional highs and lows, when we are facing so much uncertainty around COVID restrictions and are all at the mercy of Government shutting down whole states in the blink of an eye when a few people in a concentrated area contract the virus. We simply don’t know what’s coming next and whether we should ramp up, or scale back?
This is especially true for those in the hospitality, travel and events industries. Will we be able go overseas again anytime soon? Will we be able to have 100s or even 1000s of people at events again, without the fear of having to cancel or postpone due to a sudden wave of restrictions again?
Many other industries such as homewares, home improvements, trades and professional services have thrived during the pandemic period, many of my clients in these industries cited they had their best 6 months turnover ever during April – September 2020.
But any good financial advisor or wealthy investor will tell you that you should buy into the market (property or shares) when prices are low at the bottom, and sell when they are high. If we take this on as good advice, then wouldn’t it make sense to invest in our business when times are tough, and confidence is low. Everyone else is cutting costs and battening down the hatches, but the smart business people and investors are putting money into business development, increase marketing, purchasing stock looking to add new products, services and assets to their offerings and portfolios.
But human nature is to shrink back, lie low and keep the status quo, just in case it does not work out.
As a small business owner, myself, I totally understand the risks associated with just starting a business, let alone investing ongoing money, time and effort into it. I have had the sleepless nights, questioning whether I had made the right decision, purchased the right thing, hired the right person, or moved into the right premises.
It’s a scary thing to be self-employed. We do not have a guaranteed wage each week. We have added responsibility of staff, rent, suppliers and customer demands. Employees are able to come in, do the hours and work and then go home without having to worry like we do.
But self-employed people, like myself would not have it any other way. We started our business to create freedom and hopefully make more money than just being an employee. We became a business owner because our skills and passion drove us to create something that was of benefit to others.
2020 has been a roller coaster year for me. We moved house in March, went to COVID restrictions in my home state, SA a week later and in May and June In virtually spent the whole time home doing very little, as many clients stopped the consulting services due to the uncertainty and all my speaking engagements were cancelled. The past 5 months has so far been my best in the last 2.5 years since I started my speaking and consulting business.
So as 2020 comes to a close, and we reflect on the year that was, take a look at your financials. How did your year really go? Maybe it was better than you think? How can you change things up next year? What different products and services could you come up with to help mitigate the risk of having too many eggs in one basket so to speak. This will give you different streams of income and help boost profits.
I invite you to get off that "merry go round" before anymore disruption hits.
YOU can start building a business that is equipped to thrive in 2021 and into the future with less frustration and stress and without losing your sanity.
You have worked so hard to build what you have; you deserve wealth, freedom and happiness. Remember: you are in business for yourself, but not by yourself. Reach out to a trusted advisor if you are feeling overwhelmed in your business
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