Business cash safety net: how much should you have saved?
EPISODE 86
Notes
In a time where the world is facing some major crises, it’s easy to think that focusing on things like business growth or saving money is frivolous, if not insensitive. I’ll be the first to put my hand up and say that it’s been challenging to know where to put my focus when there is so much going on.
However, maintaining financial health is not just necessary to continue growing our businesses, but to ensure we can continue putting food on the table, paying rent and caring for our families. In today’s episode, I’m diving into the topic of building a business cash safety net to help you protect your business's financial future.
As we navigate through life and business, it's important to recognise that unforeseen challenges can arise at any time. From global crises like the COVID-19 pandemic to changes in the market, having a financial safety net in place can be a game-changer. While there are many differing opinions on the amount of savings a business should have at any given time, I believe each business owner should consider their situation and do what’s right for them.
I take you through five steps to consider following so you can better understand what savings you need for a healthy business safety net:
Understand your fixed and variable costs
Consider liabilities and cash outflows
Determine the timeframe your safety net will cover
Safeguard the funds
Regularly review and adjust
When it comes to figuring out the right amount of savings for your business, one size does not fit all. It depends on so many different factors, including your personal circumstances. I encourage you to take some time to consider what safety net is right for your business and start putting money towards it today. In doing so, you’ll gain the peace of mind that comes with knowing you can weather unexpected financial storms.
LINKS:
Register your interest in the Bookkeeping it Real Mentoring Program here.
About the
Author
Bec is a chartered accountant who worked at Australia’s big firms and banks for 15-years. Faced at a crossroads in her career, she backed herself, left her corporate job and launched Straight Up Bookkeeping. 3 years and 5 staff later, Straight Up Bookkeeping is one of Australia’s leading virtual bookkeeping businesses for creatives, with a mission to free business owners from financial stress so they can grow their empires.
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