Are you considering the move to full-time entrepreneurship shortly after experiencing a financial setback? If money fears are holding you back from making this major career change, it is understandable. Facing financial hardship in any form — including job loss, having to make late payments, or even bankruptcy — takes a massive toll on one’s mental health and well-being.

Rather than missing out on the opportunity of a lifetime, there are practical strategies that you can use to continue recovering from your setbacks — while also protecting yourself for the future. Service Savvy, LLC shares its top tips for building a thriving business after financial hardship.

Create a plan to pay off debt and raise your credit score.

If you’ve recently faced financial setbacks, there is a good chance that you have debt and that your credit score isn’t at its best. Even among the general population, research shows that 80% of Americans have debt while 34% of people have a credit score that ranges from bad to fair, according to research from Experian.

Instead of paying off debt where you can and hoping for the best, come up with a strategic plan to tackle your debt and raise your credit score. Aggressively paying down your debt will reduce the amount you owe each month, freeing up extra cash. Additionally, when you prioritize what to pay off first, you can raise your credit score even quicker. For maximum results, work to pay all credit cards below 30% of your total credit limit.

Build savings before launching your business.

Is your savings account almost nonexistent due to the hardships you experienced? Now is the time to set aside as much cash as you can. Ideally, you should do this prior to launching your new business endeavor. Think of your savings as a barrier between you and the challenges that life so often throws in your direction. Emergency expenses can come up at any time (especially as a business owner), which is why it is even more critical to save what your budget allows.

Some of your budget will be dedicated to outfitting your home office, so focus on enhancing your work space to increase productivity. Of course, this includes arranging furniture and your computer setup to allow for plenty of room to operate with good ergonomics. It’s also important to let in as much natural light as possible to avoid feeling like you’re working in a cave, and this calls for clean windows with an unobstructed view. Save yourself some time and energy and enlist the help of professionals by searching online for “window washing near me” and using customer ratings and reviews on Angi to narrow your search.

Form an LLC to reduce your personal financial liability.

Forming an LLC (limited liability company) comes with a host of impressive benefits. For those who are unfamiliar, every business owner is required to run their company under a chosen business structure. Sole proprietorships, S corporations, corporations, and limited liability companies are some of the most widely used business structures. On top of requiring less paperwork and providing you with tax advantages, forming an LLC ensures that you are not held personally responsible for your business’s debts. This is critical when looking to protect your finances.

Save time by outsourcing.

When time is money, outsourcing labor-intensive administrative tasks like payroll makes a lot of sense. Look into hiring a virtual assistant (VA) like Service Savvy to take the paperwork off your plate. One of the big benefits of having a VA include being able to scale up operations, as the money you save on less overhead can be invested back into the business. Plus, it frees up your time not only for strategic thinking for your business but for spending more time with family, which plays into a healthy work-life balance.

Generate multiple streams of income.

Finally, one of the best ways you can protect your finances while making the switch to full-time entrepreneurship is to create multiple streams of income. As a new business owner, this is a must-do. Relying on just one source of income can quickly cause your funds to run dry if business is slow. When you’ve set up several steady streams of income, you don’t have to worry if your new endeavor isn’t generating the revenue you’d anticipated. The College Investor notes several ideas for creating multiple streams of income include taking up gig work, writing a book, selling an online course, or investing.

No matter what financial challenges you recently endured, the goal of becoming an entrepreneur is fully achievable. By following the strategies above, you can launch your business with confidence and hope for a bright future.

Service Savvy, LLC is a Virtual Assistance company designed to save you time and money by performing various administrative tasks required to successfully run your business. Give us a call today! (470) 451-8007