Unpredictability is a very scary thing for businesses. For both financial and stress-avoidance reasons, business owners generally want things to be as predictable as possible when it comes to their business. The unfortunate reality though is that unexpected events do sometimes happen to businesses.
Unexpected events, when they occur, can pose financial challenges for companies. This can particularly be the case for small businesses. Given their smaller size, such businesses can be particularly heavily impacted by financial fluctuations, which unexpected events sometimes trigger.
Thus, preparing for the possibility of unexpected events is very important for small businesses. One thing that can help with preparing for such events is to take the possibility of unexpected events into account when it comes to the company's budget. This could help create a bit of a cushion within a small business' budget that could absorb some of the financial shocks of an unexpected event. Some examples of budget-related things businesses can do to prepare for such events include:
- Take into account what sorts of unexpected events the business could particularly be at risk of experiencing (different businesses have different risks) and plan accordingly in the budget.
- Adjust the budget when changing circumstances expose the business to new kinds of risks.
- Overestimate expenses when budgeting.
Another thing it can be important for small businesses to do when it comes to unexpected events is to respond properly to such events when they occur. One type of unexpected event that sometimes arises for a small business is a legal dispute with a customer, other business or government agency. When deciding how best to respond to a business dispute, understanding what options it has and what potential implications the dispute could have can be very important for a small business. Business law attorneys can advise small businesses on their situation and options when they are facing a business dispute.
Source: Business News Daily, "6 Smart Budgeting Tips for Small Business Owners," Nicole Fallon Taylor, August 26, 2015