Risk mitigation made easy with shelf corps!

The economic contraction that has been wrought by the slowdown is different from any other in living memory. Its impact has been so overwhelming that no one has been left untouched. Almost all countries in the world have contracted by significant margins in the first two quarters of the year. Such an event of cataclysmic proportions has not been recorded since the second world war.

We don't know how much more pain the economy has to face, as the virus seems to be showing no signs of slowing down. The sad thing is that it has caught so many unprepared! Many businesses did not face bad times in the 80s, and 90's, so they thought the good times were here to stay forever. After, all the famous economic historian Fukuyama had suggested in the 90s that the collapse of the USSR was the end of history. It seemed that the capitalist model had triumphed. However, we know that history has a habit of biting you back when you least expect it!

So, why don't small business owners focus so much on these issues? Also, no one wants to anticipate bad times, or plan for them as the human mind does not like to contemplate disasters. But events in the last two decades have now diverted the attention of owners and managers to this aspect of managing risk. We will suggest a hack to ensure your business's long life without too much stress.

Build credit buffers in good times

Imagine that your firm cannot repay the debts it has incurred. In such a case, it can become unsustainable as the previous liabilities become too much to bear. You can't let such an event destroy your morale and your ability to do business. You can avoid the pain of such an event by diversifying proactively, and avoid waiting for bad times to come and hurt you. Invest in a shelf corporation when you have a surplus, and divert some transactions to this firm. Apply for a credit card in the name of the firm and gradually increase the limit before going on to other funding instruments. This process can take a bit of time, so if you plan on staying the course, you need to put it into action now! After all, each crisis brings an opportunity to improve as a firm, and you should not waste the current one!