Building Cash Reserves

0 like 0 dislike
437 views
in Articles - SwiftHeroine
Building a financial cushion for your business is never easy. Experts say that businesses should have anywhere from six to nine months worth of income safely stored away in the bank. If you're a business grossing $250,000 per month, the mere thought of saving over $1.5 million dollars in a savings account will either have you collapsing from fits of laughter or from the paralyzing panic that has just set in. What may be a nice well-advised idea in theory can easily be tossed right out the window when you're just barely making payroll each month. So how is a small business owner to even begin a prudent savings program for long-term success?

Realizing that your business needs a savings plan is the first step toward better management. The reasons for growing a financial nest egg are strong. Building savings allows you to plan for future growth in your business and have ready the investment capital necessary to launch those plans. Having a source of back-up income can often carry a business through a rough time.
When market fluctuations, such as the dramatic increase in gasoline and oil prices, start to affect your business, you may need to dip into your savings to keep operations running smoothly until the difficulties pass. Savings can also support seasonal businesses with the ability to purchase inventory and cover payroll until the flush of new cash arrives. Try to remember that you didn't build your business overnight and you cannot build a savings account instantly either.

Review your books monthly and see where you can trim expenses and reroute the savings to a separate account. This will also help to keep you on track with cash flow and other financial issues. While it can be quite alarming to see your cash flowing outward with seemingly no end in sight, it's better to see it happening and put corrective measures into place, rather than discovering your losses five or six months too late.

Please log in or register to reply to this post.

Related posts

0 like 0 dislike
0 comments 1,378 views
0 like 0 dislike
0 comments 476 views
0 like 0 dislike
0 comments 446 views
0 like 0 dislike
0 comments 437 views
0 like 0 dislike
0 comments 440 views
0 like 0 dislike
0 comments 475 views
0 like 0 dislike
0 comments 468 views
0 like 0 dislike
0 comments 451 views
0 like 0 dislike
0 comments 435 views
0 like 0 dislike
0 comments 419 views
0 like 0 dislike
0 comments 438 views
0 like 0 dislike
0 comments 462 views
0 like 0 dislike
0 comments 417 views
0 like 0 dislike
0 comments 426 views
0 like 0 dislike
0 comments 457 views
0 like 0 dislike
0 comments 406 views
0 like 0 dislike
0 comments 435 views
0 like 0 dislike
0 comments 441 views
0 like 0 dislike
0 comments 399 views
0 like 0 dislike
0 comments 422 views
0 like 0 dislike
0 comments 396 views
0 like 0 dislike
0 comments 466 views
0 like 0 dislike
0 comments 384 views
0 like 0 dislike
0 comments 381 views
0 like 0 dislike
0 comments 374 views
0 like 0 dislike
0 comments 380 views
0 like 0 dislike
0 comments 322 views
0 like 0 dislike
0 comments 347 views
0 like 0 dislike
0 comments 314 views
0 like 0 dislike
0 comments 311 views
0 like 0 dislike
0 comments 369 views
0 like 0 dislike
0 comments 358 views
0 like 0 dislike
0 comments 315 views
0 like 0 dislike
0 comments 409 views
0 like 0 dislike
0 comments 360 views
0 like 0 dislike
0 comments 337 views
0 like 0 dislike
0 comments 328 views
0 like 0 dislike
0 comments 360 views
0 like 0 dislike
0 comments 361 views
0 like 0 dislike
0 comments 405 views

55,458 posts

595 comments

2 comments

855,507 users

Connect with us:
...