You’ve heard the case for ensuring you have an emergency savings set aside for your personal finances. Turns out you should have one for your business too. The amount needed will be up to you and your essential operating budget, but plan on having at least six months’ worth of funds that you can access if times get tough. Let’s look at the benefits of doing just that:
Your business will gain Financial Stability during unexpected situations such as a downturn in income or can act as a buffer to cover unexpected expenses.
If you’ve had your business for very long, you have lived through trying times in managing Cash Flow. Having an emergency savings will give you ease of access to temporary funding without having to take out a loan or cease your operations.
Businesses face risk – just like your household. Emergency savings acts as a Risk Mitigation Strategy. If your equipment breaks down, no need to stop operations until you have the funds. Tap into the emergency funds with no fees or interests rates to worry about.
There is nothing more disheartening than having to layoff a critical employee because your cashflow was reduced. Carryover staffing with your emergency funds, which goes a long way to ensure Employee Loyalty and Security.
You’ll be able to pivot and go after immediate Opportunities when you have the funds to do so. Don’t let the lack of funds stop you from landing the next big thing.
While debt can be a good when managed properly and the ROI is well worth the debt, relying on credit cards or a line of credit for emergencies can get very expensive. Be Strategic about Debt.
Lastly, there is something to be said about having funds set aside when it comes to your ability to Think Clearly and Strategically. You won’t hit the panic button.
Get started to today with building your emergency funds. Not sure how to get started? Jasmin Group LLC is here to help you strategize in increasing your income and reducing expenses. Contact us today at [email protected].
