This post contains affiliate codes – if you use them, we may both get a bonus!
How to build a business savings
You probably already know that you need an emergency savings account, or money set aside for personal emergencies, but what about for your business?
You can (and should!) have that too! And if you have ever wondered how you can start when so. Much. Money is going out the door, I won’t sugar coat it – it isn’t easy, but it is possible.
Take a detailed look at how much money you are making
Look at your current sales, your pricing, and your future sales (anything coming in via wholesale, anything paid on Net 30, all of your sales goals).
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Does your current level of sales in your business cover what expenses are going out the door? If not, could you make more sales, or raise your prices?
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Have you paid yourself? Do you need to pay yourself?
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What is left over?.
You can and I would argue, should pay yourself from your business. So start there, since paying yourself can also help you set aside money for both personal and business savings.
Make sure that you have an account for your business taxes
I personally, like having a totally separate account to add money to for my small business taxes. Preferably, and account that is higher yield, and maybe even one that is an online account. Enter Qapital! It’s a savings account that let’s you round up, set aside money towards specific goals and best of all, when you sign up using my code, we both get $25 to start our savings journey!
How much money should you set aside for your business savings?
Way back in the day, advice used to state that you should have a year’s worth of expenses in reserve or savings. That isn’t as realistic a number right now, so I have been recommending to aim for 3 months expenses in reserve at a minimum. With a business savings account like Qapital, you can set aside little bits of money at a time, or round up purchases to set aside whatever you can – remember that creating a business savings cushion doesn’t have to happen over night! You can take small steps and build it over time.
What about investing as a small business owner?
You’ll want to start by meeting with a Certified Financial Planner to ensure that you are meeting your goals. but if you aren’t there yet, I like using apps like Stash Capital. I can invest small (sometimes as little as $5!) amounts of money and manage the account on my own.
I don’t always pick winners, but having this money in a place that is earning interest is a huge peace of mind for me!
When you use my code, you and I both get $20 to invest!
Investing and saving money as a small business is one way to create stability and peace of mind as a business owner. And that peace of mind when you have money set aside for emergencies or capital expenditures is one way to create that mental freedom that let’s you get back to the strategic work you need to do.
What is one step you can take to create a business savings?
One way I incorporated a savings plan into my business was to add a small line item to my cash flow projections. Even setting aside $10 here, or $20 there built up a nice cushion in just a few months. I’d set aside any small amount so that it didn’t disrupt my cash flow, and having that extra money on hand has saved my a$$ on more than one occasion, and saved me from incurring finance charges on my Line of Credit.
When can you start a business savings account?
Start anytime! And truly, if you can only toss $5 into your business savings at a time, that is way better than never setting aside anything. You’ll see it add up in no time!
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