6 Strategies to Bounce Back From Financial Setbacks
No matter where you are at on the success and failure spectrum, there will always be bumps in the road and financial setbacks. One thing that must be realized is that setbacks are temporary. If you choose to complain and soak up pity from everyone things won’t turn around.
Here are six strategies to implement next time things get tough with money.
1. Exhaust all of your relationships and contacts.
You have friends, family and business contacts. Use them. I don't mean that you should ask them to lend you money. Instead ask them to open any new doors to relationships that could turn out profitable.
Related: 4 Big Challenges That Startups Face
Make a simple email or phone call to your contacts letting them know that you’re aggressively pursuing more deals, leads and opportunities, and you would love to connect with them or anyone they may know that would have an interest in helping you. Be simple, straightforward and honest. You don’t have to come up with some big fancy pitch, just get straight to the point in a friendly way. The key with any relationship is that you need make sure you reciprocate when the shoe is on the other foot.
2. Work twice as much as everyone else for a while.
Billionaire Mark Cuban made the statement, “You need to work with the mindset that there is someone out there working 24 hours a day to take it all away from you.”
This is great advice no matter what kind of financial shape you are currently in, but when tough times come, pushing yourself to the limit is going to be necessary to get things back in order.
For starters, begin by lining up new opportunities, leads and deals into your pipeline, so down the road, you can avoid further financial setbacks.
Also, sacrifices need to be made. Stop watching your recorded TV and playing on social networks when you get home. Before you go to bed, come up with a detailed game plan for the following day.
Now, let me be clear, there are NO guarantees that if you work harder, you’ll end up with more results. I also want to be clear in saying that if you put in “double time,” exhausting every possible lead source, opportunity and relationship the law of large numbers will be on your side.
Related: 10 Reasons to Remain Inspired When the Wind Blows
3. Become extremely frugal.
Enough small holes can sink a ship of any size. When you’re in the midst of extremely tough financial times, you can't buy things you don’t need. Every penny matters.Take an extra week between your usual haircut times. Strip your bills down to the absolute necessities. Cut out cable for a while. If you can’t cook because you’re in a hurry, get carryout so you don’t have to add gratuity to your bill. These little savings can go a long way.
4. Prioritize bills.
This is one that you need to be smart and strategic about. Before I proceed in telling you this tip, I want to make it clear that I’m not an advocate of not paying your bills on time. I am saying that when you’re in tough financial times, this tip will come in handy.
First off, you want your credit protected as much as possible during these times. So, you need to find out which monthly bills report to the credit bureaus and how fast they report missed or late payments.
From there, you should figure out which bills you can stretch the longest without payment, while still maintaining a positive credit standing with the bureaus. From there pay the most crucial bills first and prioritize down from there. This strategy will allow you to have the most available working capital for the longest time possible.
5. Plant seeds.
To avoid these stressful times in the future, make sure you are constantly nurturing your relationships. You want them to think of you and feed your business in the future. It could be months or even years before you see the fruits of certain relationships, but when it happens, you’ll be proud of yourself for being patient and putting in the efforts.
6. Take advantage of the urgency to create another stream of income.
When you’re dealing with a financial setback, it can be a blessing. When you are experiencing tough times, take advantage of the built in urgency by starting another stream of income. Maybe you pursue another business on the side. Maybe you start investing in real estate. It can be anything. If you have another income stream, the fall isn’t nearly as hard when your main income source takes a hit.