We’re living in the age where most of us spend a significant share of our income in livelihood. Recently we’ve seen a steep decline in savings. This is why most entrepreneurs assume that they must go into debt if they kick-off a business. Most Americans have established this idea. They don’t even think that they could save up good money needed to cash flow their small businesses and keep away from going into debt.
As per a statista report, the saving rate of Americans has significantly dropped from 12.9% to just 2.4% between 1980 and 2017.
If you too see the same problem, you’re not alone. Nearly half of the small business owners are struggling with cash-flow. As per a 2017 GoBankingRates report, 57 percent of Americans have less than $1,000 in their saving bank accounts.
However, it’s an improvement from the last year when 69% of Americans have less than $1,000 in their saving accounts.
So, how to build up savings for launching your business? In this article, we’ll discuss four actionable tips for building a corpus to launch your small business.
Img source: mapbiquity.com
Contents
1. Examine your entire expenses
The first step towards saving your earnings for your business startup is — tracking record of your costs and the areas where you can cut down. Fortunately, today we have apps such as Financial Calculators, Mint, Monefy, and Expensify which can help you in the purpose. These apps connect to your accounts and automatically classify each of your expenses under the sections like food and travel.
Once you’ve examined your expenses, you’ll be in a better position to gauge and manage your funds. You may be able to find out the areas in which can cut down the expenses.
2. Cut down your unnecessary spending
Cutting down expenses that are not essential is one of the ways most people usually use to fight against debt. Saving on weekend shopping, eating out, purchasing expensive clothes and ornaments, etc, can come up with good money over the period. And, this amount of money may be used to pump up your cash flow needed for your small business startup.
3. Automate and separate your savings
Open a separate saving account and link it to your salary account or the account in which your payment is credited. Then, set a fixed amount to be automatically transferred each month. At the same time, de-link your new account from other accounts and checking so that you won’t be able to withdraw a penny. Over the course of a year, your new account will have a good saving.
Img source: calculator.co.uk
Is saving not in your habit? Use a smart app that connects to your accounts and analyzes your expenditure. You can also set a specific goal, and the app will spread out your savings appropriately.
4. Analyze your needs
Analyzing your need is one step closer towards avoiding unnecessary expenses and building the necessary fund to launch your small business. When in store, either offline or online, ask yourself a question before placing your order — is it the thing that you really need?
Most of the time, your answer will be “NO.” Since the product/service you’re looking for entices you, you won’t like the answer, but it’s essential for you to hear your inner voice which will help you skip purchasing things that are actually not required.
5. Go slow and steadily
Don’t take a big step at the start of your business itself. Although it’s human nature to do almost everything at once, take every step with utmost care keeping your budget and risks associated with the business in mind. Any mistake, in the beginning, may eat out your entire funds.
Marketing materials do help in establishing a brand and creating brand awareness, but it’s expensive, and obviously, you won’t like to invest a considerable amount in it. But by making use of free online tools such as Designhill logo maker, you can save a significant amount which would be used to give your startup a push.
Img source: medium.com
The best part of the tool is that you can design logo on your own in just five minutes, no matter you’re design-savvy or not. Most of graphics design jobs such as business cards design and brochure design can be accomplished by using several tools offered by Designhill.
Conclusion
While kicking-start your small business, managing cash flow is one of the critical factors involved in running a successful business entity. Merely putting a massive amount in any given business doesn’t guarantee success. It needs smart management, wise decisions, and honest efforts. You, being a small business startup, need to invest even a penny with utmost care. Take as much advantage of free tools and resources as possible.
Hope these tips help you for building up savings to launch your small business.
Cheers!
