Small- or medium-sized business ventures can be immensely rewarding to run, but they also come with their fair share of financial challenges. From managing cash flow and navigating market fluctuations to dealing with unforeseen expenses, SMEs and startups often find themselves in unpredictable situations. External factors like economic downturns or sudden industry shifts can also disrupt operations and strain resources.
It’s precisely in unpredictable and difficult situations that businesses need a financial contingency plan. A well-thought-out plan helps leadership anticipate potential risks and prepare for them so that the company can continue operating during turbulent times.
At Maya Business, we understand the unique challenges that smaller businesses face. That’s why we’re committed to providing the tools, resources, and support your business needs to maintain financial stability and achieve sustainable growth, no matter the circumstances.
In this article, we’ll share practical tips to help you create a financial contingency plan that can boost your business’s resilience. Whether you’re just starting out or looking to reinforce your current strategies, these insights will help you weather challenges and thrive.
1. Assess and Prioritize Risks
Don’t risk getting caught on the back foot in case any threats to your operations do materialize. Instead, take a proactive approach by identifying potential risks and planning for them in advance. Are there gaps in your supply chain? Could fluctuating demand impact your revenue? Once you have a clear picture of such risks, evaluate them based on their likelihood and the severity of their impact. Prioritizing them helps you focus your resources on mitigating the most pressing threats.
2. Secure Access to Credit
Ready access to credit can be a lifeline for your business when financial challenges arise. Credit lines are a highly flexible borrowing option that lets you borrow only what you need, when you need it, and pay interest solely on the amount you use. This makes them an ideal tool for managing cash flow gaps, covering unexpected expenses, or even seizing time-sensitive opportunities. They’re also overall more dynamic and responsive than lump-sum loans since you can use them incrementally. Establishing a credit line before you face financial difficulties ensures that your business has a safety net in place when timing is critical.
At Maya Business, we understand the importance of having reliable access to funds, which is why we offer Maya Flexi Loan. This customizable business loan allows you to withdraw funds as needed, directly into your Maya Business deposit account. We’ve expressly designed our business banking loan solution with a streamlined application process, quick disbursement, and borrower-friendly terms, so it will give you the agility to address both immediate financial needs and long-term growth opportunities. Try it for yourself and you’ll soon see why it’s the preferred business loan in the Philippines for many of our partner businesses.
3. Take Inventory of Funding Sources and Assets
The better you know what resources are already at your disposal, the easier it will be for you to weather times of financial strain. Conduct a thorough inventory of your funding sources—savings, credit lines, and liquid assets—and consider how you might utilize them in an emergency. Don’t overlook physical assets that your company might leverage if need be, such as equipment or property that you can sell or use as collateral. Full awareness of your resources empowers you to make informed decisions and act swiftly when challenges arise.
4 Identify Your Most Important Resources
In a financial crunch, you’ll need to understand which parts of your business are non-negotiable for staying profitable and keeping operations running smoothly. Take a hard look at your resources—be they human, financial, or material—and determine what you absolutely need to deliver your core products or services. At the same time, identify non-essential expenses or projects that you can pause or streamline without significant harm to your business. For instance, renegotiating supplier contracts, consolidating job roles, or scaling back on discretionary spending are all potential areas for cost-cutting. Aim to protect your most important resources while trimming the fat; this way, you can stay lean and focused during challenging times.
5. Build a Cash Reserve
A cash reserve works as a financial buffer that allows you to handle sudden expenses or weather slow sales without breaking a sweat. To build one of your own, try saving enough to cover three to six months’ worth of operating expenses. It might be tempting to reinvest every penny back into growth, but setting aside a portion of your earnings for emergencies is one of the most effective ways to maintain long-term stability. Keep these funds in an easily accessible account so you have the liquidity to respond quickly to any financial hiccups, no matter how sudden.
Weather All Financial Storms with Support from Maya Business
With the right tools and partners at your disposal, you’ll never have to fear your business going under when times are tough. Sign up for Maya Business for access to our suite of payment, disbursement, and business banking solutions that you can use to elevate your operations and tackle challenges head on.
Once you open a Maya Business account, you can set up a Maya Business Deposit account and use it as your settlement account. With an industry-leading 2.5% per annum interest rate, you’ll earn PHP 25,000 in interest per year on a PHP 1 million deposit. This also grants you the privilege to send money to your partners and suppliers for free via InstaPay and PESONet, so you can funnel what you would have spent on transaction fees into savings instead.
Signing up also qualifies you for a no-collateral Maya Flexi Loan offer of up to PHP 2 million in just 3 months, which you can readily draw from in emergencies. Just use Maya as your primary processor for all wallet and card payments. The more you use our solutions, the better the loan offer will be.
Sign up for Maya Business today to enjoy all these benefits and more.
