Ever since the COVID-19 pandemic broke out, a great number of small to medium-sized businesses across the US have been forced to shut down, and while some have managed to restore operations, others have disappeared without a trace.
This was mainly due to the immense financial losses they were facing/experiencing at the height of the pandemic which led to global lockdowns and mask mandates, drastically reducing the number of consumers in the market.
However, these losses can be caused by a number of different factors, and your ability to deal with them is what sets apart a promising company from dozens of others.
A major loss on investment can be emotionally damaging and feel like your entire life has been thrown off the tracks, but by taking things one step at a time and understanding that losses are a natural occurrence, you can offset a portion of this damage and keep moving forward at the same pace.
Expect the worst
Every investment comes with its own amount of risk, and usually, the riskier the investment, the greater the reward, which is something seasoned investors are well aware of.
Unfortunately, first-time entrepreneurs often wrongly assume that the world of business is much simpler than it actually is, leading them to overcommit to certain investments or business opportunities before actually weighing their worth.
That being said, you shouldn’t avoid an opportunity just because it’s risky, but rather, spread out your assets in a way that prevents them from impacting your financial health to a great degree if some of them flop.
Staying prepared for the worst while also hoping for the best is one of the best ways to approach running a company or making investments on the market, and if you’re able to stay relatively safe while also exposing yourself to healthy amounts of risk, it won’t take long for it to reflect in your company’s standing.
Invest in an emergency fund
Even if your assets are balanced, you could still experience some major losses if everything lines up properly, and you should always have a plan C to rely on.
Emergency funds are generally considered one of the best ways to hedge against financial ruination if you experience a loss in revenue or income, and experts recommend having at least 3-6 months’ worth of income set aside for a rainy day.
This way, even if you’re not generating any income, you can rest easy knowing all of your other expenses are taken care of, and while you won’t be able to afford any of the luxuries you may have been able to previously, it’ll help take your mind off the issue of money and allow you to focus on getting yourself out of the sticky situation you’ve found yourself in.
Even if things seem like they’ve spiraled completely out of control, the last thing you should do is panic, as it’ll only make the situation that much more difficult to handle.
When you’re in a panicked state, you’re much more likely to make impulsive decisions, oftentimes ones that will negatively impact your business even further.
Choosing to redeem your funding units or sell your entire stock the moment the market begins going down is probably the worst thing you can do in terms of working toward your long-term goals, as short-term losses usually distract you from the big picture.
At the end of the day, your long-term goals are the most important ones, and if you remain dedicated to them, no amount of loss will be able to deter you from your path.
Finally, you should prevent yourself from dwelling on the past, and if you’ve managed to push through a loss once, you shouldn’t let it impact the way you handle your business in the future.
Of course, this doesn’t imply that you shouldn’t try to learn anything from the experience whatsoever, but you should try not to let the fear of loss prevent your business from flourishing.
On the other hand, if the factors that led to your loss were external, such as the pandemic, you will have learned to deal with some of them through this experience, and if a similar situation comes up in the future, you’ll be able to handle it accordingly.
A good option for moving forward is to actually take a short break and focus on what’s truly important, while also honing the skills you’ve already got, and if you’ve completely lost interest in what you’ve done before, there’s nothing stopping you from turning over a new leaf and taking another shot at the market.
The options are practically endless, and as long as you’ve got a promising idea, you’re more than likely going to be able to make it into a reality, so long as you remain dedicated to it.