Building an emergency fund for your business makes smart financial sense. Having a safety net in place to handle things like unexpected corporate expenses, liability issues and emergency repairs that need immediate attention is one way that your business can weather any storm. Setting aside an emergency fund also eliminates the need for you to have to seek out a title loan, something that can cost your company dearly in the long run.
Make Savings Automatic
One of the best ways to set aside money is to make savings automatic. This means that when you’re paying off your business accounts at the end of the month, you have a line item that’s dedicated to savings. Treat this line item as importantly as you treat any other business expense. After a while, you won’t even notice it, and your savings will begin to grow.
Place Your Money Where It Will Grow
Put your money into an account that allows it to earn interest and grow. You don’t want a restricted account that applies penalties if you withdraw the money early, but you do want to put it into an account that allows you to gain some interest as your balance increases. Do a search to find out if there are options like high-interest, no-risk savings accounts or low-risk bonds that can help your deposits grow more quickly than regular accounts.
Put Away Extra Money During High-Profit Times
When times are good, increase the amount of money that you’re putting away in your business savings account. Don’t spend that extra money or spend it on office goods, but instead you should dump right into your savings account. This increased amount will act as cover for those inevitable months when your earnings are not as high, reducing the amount of money you can add to your savings. This is a great way to ensure that your savings remain consistent throughout the year and don’t dip during down times.
Cut Down on Outsourcing
Reduce the amount of times you outsource your company’s tasks. Outsourcing and freelancing adds up much more than you realize. You may reasons that outsourcing saves your business time on the short end, but in the long run you’ll end up spending a lot of money. The time saved could end up costing your company’s bottom line dearly. Think about all the tasks that you outsource in your office, and see if there are any that you can cut or at least reduce without losing too much time. That extra money that you save can go right into your savings.
Cut down on unnecessary business expenses.
Business expenses take up a lot of your company’s earnings, and that’s to be expected. Look into those expenses, however, and see if there are areas that you can cut.
- If you have employees that need to travel to other cities on a regular basis, maybe there’s a way that that travel can be cut down or reduced. With digital conferencing a regular part of life, it may be possible for you to have digital/remote conference calls instead of having in-person one, reducing the need for constant travel.
- Another area that companies spend a lot of money is on office supplies. If you’re regularly printing large documents, maybe there’s a way that you can deliver digital files. Instead of handing everyone a 700-page document for every meeting, it may make more sense to project the document onto al television screen. These little changes can make a huge difference in how much profit your company sees each month.