How to Grow Your Savings While Growing Your Business. Prioritizing savings for small business owners who want to take their company to the next level can be difficult. According to research, small firms with monthly expenses of more than $10,000 have an average of only two weeks’ worth of savings.
However, putting money aside isn’t as difficult as you would believe. Here are a few easy techniques to increase your savings while expanding your business.
Set Clear Savings Goals
Establishing savings objectives is an excellent first step toward optimizing savings. These should be based on your existing requirements and include goals for many aspects of your company. Setting objectives can assist you in a variety of ways, including:
- Getting your taxes paid
- Taking care of monthly costs
- Preparing for the unexpected
- Putting money into your company
- Selling your company
- Making preparations for retirement
The ability to plan ahead is another advantage of goal-setting. You may prepare yourself for future strategic growth by deciding which parts of your organization can benefit from additional cash.
Separate Your Savings Into Different Buckets
While it may be tempting to keep all of your savings in one location, to simplify your finances, we advocate separating your personal and corporate savings. This can help you avoid mistakenly combining your personal and corporate savings and wasting money you’ll need later.
Separating your personal and corporate savings will make it easier to set aside money for taxes and avoid any “oh no” situations during tax season. You can construct distinct buckets for each of your savings goals if you want to be even more careful with your money.
Look for an Account That Can Help You Achieve Your Goals
It’s now time to look at your account choices. Savings accounts built specifically for small businesses are frequently a good choice. These accounts contain unique characteristics that aren’t often found in personal savings accounts.
Square Savings was created with business owners in mind and allows them to organize and manage their money in a way that best suits their needs. It also allows you to automate savings by deducting a certain percentage of each sale. Depending on what works best for them, business owners can opt to deduct anywhere from 1% to 20% (or more).
Unlike standard savings accounts, Square Savings can also give a greater rate, with an APY that is 8 times the national average. 2 This could lead to enormous growth over time. Furthermore, savings can be divided into folders to correspond to specific objectives.
While running a small business comes with its own set of problems, one of them doesn’t have to be making the most of your savings. You can identify an acceptable savings rate and decide how that money can benefit your organization by taking a deliberate approach to saving. You can also enable sensible investments in the future of your business by separating your savings and picking the correct savings account.