Saving is not just for the personal Budget
In today’s economy everyone is pinching the pennies. This should go for the small businesses as well.
Many businesses free spend depending thinking
- That big account will come in.
- If I build It, it will come (yes from Field of Dreams)
- You have to spend money to make money.
These cliques’ have some validity, but be a smart business owner and do it moderation. When businesses subscribe to this line of thinking 100%, they are headed for failure not Success.
Why don’t businesses use the same tack as individuals do?
- Always put some money aside
The First step in good money management is Plan for the future. This means if you know you have to buy a big capital expenditure like computers, buildings, equipment or inventory, Plan For it. Always put some away in a separate interest bearing account. Pay for most of it with cash. I personally subscribe to Dave Ramsey’s
idea “CASH IS KING”.
Yes I know many businesses buy on credit and or lease and that is not ALL bad but do it in moderation. You never know when you will lose that big client. (Don’t’ put all your eggs in one basket). The roll of thumb is Don’t Finance anything over 25% of the total cost.
I will be doing a series on budgeting and Savings for the Small business Person. Please watch for more. Ideas and follow my website for great financial tips and calculators to help with your savings goals.