Dealing with Times of Low Revenues for My Small Business

If there is one thing I have learned about being a small business owner it is that not every month can be a blockbuster month earnings wise. In fact, some months are downright pathetic revenue wise. So, I have learned to conduct a careful balancing act that sees me saving a certain amount of money from a good month of revenue to have it there when I need it for a bad month and thus always maintaining money flowing into my small business.

Knowing My Bad Times and My Good Times

The easiest way for me to prepare for the lean times is by knowing ahead of time when they will be. The first year that I had my business it was all pretty lean, but since then I have learned which months will be better for me than others.

Typically, there are two slowdowns with my small business. The first usually comes around June and the other comes almost every December. The December slowdown is easy to figure out as business owners are busy with holiday plans and have little time for me, but I'm not sure why June is usually slow. But, I do know I can expect to bring in only $1,500 in each of those months, which is far less than I need to get by.

So, I balance those low months with the months that I know will be strong, which are usually February, March and October. These months can see my revenues hit $6,000 or more for each month. Therefore, it is these months that I mainly draw from when saving for lean times.

Keeping it Liquid

The most important thing for me with my small business is being able to get access to the funds I need in order to do what I need to do. Therefore, when I do manage to have a stellar month and set out to save some money for the slow times I do so by putting it in a regular savings account. While I could likely make more interest by investing it, I need the money to be liquid at all times so I can access it quickly. Furthermore, I want zero risk with this money as not having it during the lean times could spell disaster for my small business.

Hard Lesson Learned

Like a lot of the things I have learned about business, this lesson was a hard one to learn. Years ago I had a small business and a small business partner. Our business grew by leaps and bounds almost right out of the gates. However, we never put anything aside for potential problems and instead took the extra money in our paychecks and spent it. Unfortunately, unforeseen problems hit our small business and we "robbed Peter to pay Paul" for as long as we could, but eventually our luck ran out.

As I don't have any small business credit cards, nor do I want any, it is extremely important for me to be able to have cash reserves from good revenue months to cover bad revenue months. So, as much as I would like to have some extras in life, it is far more important that my business stay open so I can take care of my family. This might mean stashing cash from time to time, but the more prepared I am, the better I will be able to weather the sometimes tumultuous storm that is the small business world.