CBIZ Sattler Adventure Sports Blog

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Ward, Hayden
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Business Survival Guide Part 1: Financial Planning

Business planning for outfitter sports

COVID-19 has impacted the outfitters industry leaving adventure sports owners with unplanned financial losses. Many current news headlines are predicting a future recession. Owners of adventure sports are undoubtedly concerned. While the total impact and slow return of outdoor businesses is unknown, success will hinge on the financial planning and preparation for guests as well as being prepared for when business returns to a more normal state.

Our first article in this two-part series will highlight the steps toward financial preparedness during a crisis. Whether it is a second wave of  COVID-19, a natural disaster, or any number of other emergencies that may temporarily shut down your adventure sports business, it is always important to be prepared. 

What to Do: Planning for a Financial Crisis

Aim to have 3 to 6 months of expenses saved for emergencies.

In a catastrophe, cash is truly king. No matter how adequate your emergency savings fund is, it is unknown how long you might need to cover expenses in the event of loss of income. The rule of thumb is having at least 3–6 months of expenses in a separate savings account.

The specific amount you decide is best for your business will depend on your comfort level, the availability of other sources of financial support, and how risky your income is. Think about your monthly recurring expenses, such as automobiles, boats, lease, equipment, utilities, and vendor obligations, plus any personal expenses this income covers. Regardless of the amount, make sure the money is easily accessible.

Create a crisis budget.

A crisis budget is reserved for your business essentials only. Cut any non-crucial expenditures when clients are scarce and loss of income is a reality. For example, if you do not need to order new gear for your team, then don’t account for it in the budget. Make sure you are looking at every line item of your business budget and evaluating if it is truly needed or can be eliminated or suspended.

Calculating the total amount of funds needed to survive will help lower stress during these unprecedented times. It will keep you ahead of the game knowing exactly where to cut spending. A wise tip is to incorporate all of your bills on a spreadsheet. Tracking spending habits allows you to understand where your money goes and what it is used for. There are several apps that can help track spending. 

Building lease/mortgage payments, equipment, adventure sports insurance, utilities, and immediate repairs need to be included within your crisis budget. Although you may not have anyone partaking in your service, it is important to have the mindset that risks still exist.

Implementing Your Plan

Balance your business and family.

Implement your crisis budget immediately and adjust your lifestyle to the change. Any expenses not related to keeping your business afloat or essential to living need to be reexamined and halted if possible. Many adventure sports owners have children at home and are assisting with online schooling. Because of online schooling or simply lack of time, many owners may be unable to spend as much time as they once could. If that is the case, monitor the business either remotely or have someone you trust keep an eye on it and manage it for the time being. Balancing your work life  while attending to family needs is a challenge; however, it is important to ensure that your business is safe and remains in good condition even while it sits empty.

Apply for financial help.

The U.S. government and the Small Business Administration (SBA)  as well as other outdoor entities have realized the devastating impact of the crisis on outfitter owners and their families. If you are eligible to apply for any financial relief, we recommend you do so. A creative way to ease the impact of a crisis is by seeking financial support and opportunities offered in your community. Think outside of the box and try promoting your business as local entertainment for small groups.

Returning to Normal Life: The Road to Recovery

Resist the urge to splurge.

After the crisis has subsided, there will be a temptation to splurge. Focus on rebuilding your crisis savings account first. Then gradually begin to start incorporating priority spending into your budget. Stick to your financial plan and take time to reevaluate your crisis planning. Was there anything you didn’t account for but needed? Plan to be on your crisis budget until you have rebuilt your 3-6 month emergency fund.

Survive the ‘stress test’.

No small business’ financial situation is guaranteed and particularly that of an adventure sports business, so we all must plan for unforeseen circumstances by:

  • Focusing on the long term and your goals when it comes to your business
  • Having an emergency savings account
  • Having an idea of how much you need to maintain building lease, insurance, equipment, utilities and your personal essential expenses
  • Being able to run your outdoor business off a spending plan
  • Immediately adjusting your business when a crisis strikes
  • Remembering people will partake in fun excursions again, and they will be looking for safe, thrilling adventure

Stay focused on your long-term goals.

The most important thing owners can do is stay focused on long-term financial goals. Set targets for your small business to measure the progress you have made. If your desired income has not been reached, adjust your plan and be flexible. Financial preparedness is peace of mind when unplanned disasters occur. Get the protection you need today and  request a free CBIZ Sattler Adventure Sport Insurance quote. Worry less and adventure more!

This blog may contain scenarios that are provided as examples only. In an actual claim situation, coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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CBIZ Sattler Adventure Sports Insurance, a division of CBIZ Insurance Services, Inc., is the largest insurer of adventure sports businesses in the United States. As part of an $850 million New York Stock Exchange traded company (CBZ), we developed a policy coverage to meet the needs for those in the recreation and outfitting industries. Our policy is underwritten by an A.M. Best Rated A++ (Superior) company.