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  • Writer's picturejordylucas3

Coping with unexpected expenses while running a small business

In many ways running a business is like running a household. When everything is going well, things run smoothly. Everyone is happy, and your routine works well. Financially, things are fine. There’s money in the bank to cover bills and a little left over for savings, investing or having some fun. Then, something goes wrong, and the house of cards collapses. One of these things is an unexpected expense.

If you run a small business, one large, unexpected expense can ruin everything. This one thing can be all it takes to shut your business down. But, it doesn’t have to.

Here’s how you can cope.

Apply for a Line of Credit

If your business has a consistent turnover and is well established, you should be eligible for a line of credit form. Try www.businesslineof.creditThis can give you access to the cash that you need to make payments and keep your business going, much like a credit card would, but usually with significantly lower APR. Even without a considerable expense, having a line of credit can help you to manage your cash flow and take advantage of any opportunities that come up at short notice. Just make sure you have a strategy to pay it off!

Keep a Rainy-Day Fund

The best way to cope with an unexpected expense is having a fund set aside to deal with it, at least partly. Try to save as much as you can when things are going well, instead of getting carried away with your success. After I’ve paid my bills, I try and put 40% of what’s left over in my savings account.


Getting the right insurance is essential. Your business should be totally covered. This needs to include things like business and liability insurance. Your business premises should be covered, as well as everything that you keep in it. If your business is worth a lot of money, or you keep expensive equipment on site, your insurance might be costly, but it will be well worth it if something breaks or is damaged. Just make sure you get new for old cover on your contents.

Prepare a Cash Flow Forecast

This is one thing I’ve learned is so important! Managing your money effectively will help you to know how much you’ve got; how much you need and where you can get it from. It will mean that you know where you can make cutbacks if you need to, and where you can free up some cash in an emergency. A cash flow forecast is like a financial business plan. It should include everything that you spend and make, as well as any changes that you expect in the future.


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