The truth about saving money for your business
Many times we aim towards having a certain financial goal before we venture out into the world as entrepreneurs, but where do we get the money from? And where do we save it?
When I decided to start my business I had just completed 7 months onboard a cruise line as an onboard DTP - this means that my savings were in pretty good shape, but starting a business wasn’t my intention at first and of course, after many failed ideas, my savings began to run dry. I decided to look for full-time work while making the growth of my business a side hustle. This decision was tough but I was committed to the cause and knew that it needed to be done.
Over time I began to love being a creative entrepreneur and using my skills and talents. It was like I found myself again. So I had to make yet another tough decision - for the financial benefit of my business. If I wanted to pursue my business full-time, I would need at least 6 months worth of expenses covered, this wasn’t achievable at the time so I decided to go back to working on cruise ships.
See, many entrepreneurs who are self-funded make sacrifices that are rarely spoken of, and with so many small businesses booming it's easy to get caught up in hiding your truth. Your journey is what makes your business special, because once upon a time that CEO you admire made sacrifices too - maybe not of monetary value, but perhaps in time, relationships or even their health. When you say yes to one thing, you say no to something else.
Being honest about your financial situation is the most important thing that you can do for your business. Need funding? Apply for that loan. Need crowdfunding? Put yourself out there. You have nothing to lose, except for your dreams - and that’s a pretty high cost. Quitting your job with no safety net or enough clientele is an opportunity for you to become hyper fixated on making money and not on servicing greater amounts of people. Our goals are easy to achieve when we’re honest about them when we’ve kicked the infatuation of achieving them and mitigating all the foreseeable challenges.
Choosing what type of account to save your money in is best decided by your needs. It is wise to separate business and personal expenses, so when putting together a savings plan don’t forget to add your business expenses too. Make a list of your expenses, multiply it by your ideal amount of cushioned months and then add tax. Don’t forget about inflation. The price of your monthly groceries now and in 6-12 months time might not be the same.
Be wise enough to also use the time that you’re working towards saving up for your business to strategise and put yourself out there - because the goal is to not spend the money you saved up. Working 6 months to save up for 4 months of expenses does not mean that you should only put effort into your marketing during those 4 months. Using your time wisely and spending it as you would money itself will literally save you from additional and unforeseeable expenses.
The best way to save up money for your business is to be realistic. Look at your goals, break them down into achievable milestones, apply for funding if need be and remember that money goes where money is valued - save, save and save! Plan for challenges, do some auditing on those pesky subscriptions and other miscellaneous expenses that don’t need to contribute towards your financial goals.
*Please note that this blog post does not serve as professional or financial advice.