3 rules that engineers must follow to manage a sudden financial crisis
A financial crisis seldom announces its arrival. In fact, by the time you realize there is a financial crisis your engineering business is firmly entrenched in it. Engineers running a small business may face unforeseen situations such as delayed payments from clients, an overrun of inventory, mechanical failure, etc. Natural calamities such as floods and earthquakes can also cause turmoil for an engineer’s business.
When it comes to tackling a financial crisis, take these 3 rules to heart.
Sort through your expenses no matter how much time it takes
When you find that your engineering firm is in a financial crunch, the first step to take is to sort through your firm’s expenses and weed out all unnecessary spending. To further simplify how you can do this in context of your engineering business, let’s divide the expenses into three sections:
Necessary: This category covers expenses such as electricity, rent, salaries, etc. Basically, these are unavoidable expenses that need to be paid regularly. However, you can reduce these expenses by being cautious such as by renegotiating the rent, ensuring that the power wastage is not high, etc.
Manageable: These are expenses which while being necessary, can be controlled in a financial crunch
Unnecessary expenses: These expenses can be easily done away with when your firm doesn’t have surplus cash.
Use your credit card/s wisely to pay for short-term business needs
Depending on the financial crisis your business is undergoing, using your credit card may be wise. If you know this is a short-term crisis such as delayed payments by a week or ten days, you can use your credit cards to fund the cash flow to tide over your immediate cash requirement. Be mindful, and use the credit card carefully. Not repaying your bills attracts a high interest, so ensure you are using a separate business credit card only for necessary business expenses.
Use a loan option such as a professional loan for engineers
Having a convenient source of external funding ready is the key to overcoming any financial crisis. An ideal way to manage one is to get a customised engineer loan. These are made for engineers like you, and thus feature simple eligibility criteria and nominal interest. The additional funds will help you tide over the financial crises with ease without making repayment a burden.
Here is how to get started:
Check eligibility criteria for your engineer’s loan: The first is to check your eligibility. The eligibility criteria of Loan for Engineers is you need to be a self-employed or a consultant engineer between 26 and 65 years of age, with a minimum of 3 years or experience with over 5 years of work experience after graduation. Documents required for engineer’s loan: The documents required include KYC documents such as ID proof, address proof, photographs, your engineer’s degree certificate and business proof.
Once you check and confirm your eligibility, the application process is easy as is the documentation. Lenders offers finance for engineers at a competitive interest rate and ensure quick transfer of finances into your account.
These three suggestions will help you manage a financial crisis; however, the key to avoiding one is to look through your business finances every month. If you need help to do this, hire an accountant and go through your invoices and bills carefully. This will help you predict gaps in capital and gives you time to plan your finances.