The age we live in is one where a lot of us spend a significant amount of time sharing our income in livelihood. A lot recently there has been quite a steep decline in savings habits. This explains why most entrepreneurs feel like they just have to go into debt if they must start up a business. A lot of Americans have bought into this idea, and they don’t even bother to sync that it is possible to save up a right amount of money required to cash flow their small businesses and stay away from debt.
According to statistical reports, there has been a significant drop in the savings rate of Americans from as high as 12.9% to as little as 2.4% just between 1980 and 2017.
If you are experiencing the same problem, then you must know that you are not alone. Almost half of the owners of small businesses are currently struggling with cash flow. According to the 2017 GoBankingRates report, as much as 57% of citizens of the united states of America house below $1000 in their savings bank account.
Nonetheless, it can be considered an improvement from 2016 when about 69% of Americans did not have as much as $1000 in their savings bank account.
So if you do not want to go into debt, what is the best way to save up cash for launching your business? In this article, we will be exposed to you, four actionable ways in which you can build up enough financial backing for your small business.
1. Examine your overall expenses
Taking records of your costs and pinpointing the areas that you must cut down is the very first step towards saving your earnings to help you gather enough money for your business startup. Fortunately, apps such as mint, financial calculator, expensify, and monefy have been made available to us today, and they can help you achieve this purpose. When you have any of these mobile applications automatically connect to your account and classify each of your expenses under different sections like travel and food.
Once you have been able to examine your expenses, you find yourself in a better position to manage engage your funds. You would understand what areas you need to cut down spendings.
2. Cut down every unnecessary spending
One sure way people have used to fight against debt for a while now is cutting down their expenses in areas that are not essential. Saving on eating out weekend shopping purchasing ornaments on expensive clothes buying cinema tickets every Friday night and others, can help you put together a significant amount of money within a short period. The amount of money saved from cutting your unnecessary expenses will go a long way to pump up your cash flow required to start up your small business.
3. Automate and separate your spendings
Open a separate bank account and have it linked to your salary account or to the account where you have your payments credited once that is done set a specific amount to be automatically transferred from your salary account to the new savings account. Make sure that your new account is not linked to any other account apart from your salary account and make it in such a way that you are unable to withdraw even a penny.
At the end of the year, you will discover that you have been able to save a good amount of money that might be enough for you to kick start your business and maybe have extra for miscellaneous expenses. I totally understand if saving is not in your habit you can make use of any of the smart savings apps available and connect them to your account then proceed to analyse your expenditure. Even if you decide to set a specific goal, the app will help you spread out your savings accordingly.
4. Examine your needs
It is essential that you know the difference between your wants and your needs. Being able to analyse your needs is a step in the right direction towards avoiding unnecessary expenses, and putting together the necessary funds required to start up your business. When you go to an offline story, or you find yourself in an online shop, the first question you need to ask is, do I really need this thing? Once you ask yourself that question before placing an order, your answer will most likely be “NO”.
Because the product or service you’re searching for or that you have found in the store is one that entices you, you will not like the “NO” answer that you got after asking yourself that question. But, it is essential for you to listen to your inner voice and take a step to skip purchasing things that you do not really need.
5. Go slow and steady
At the start of your business itself, you do not need to take a big step. Even though it is human nature to want to do everything at once, you must take every step cautiously and keep all the budget and risks associated with your business in mind. If you make any major mistake at the start of your business, you may find out that its eat out your entire savings.
Marketing materials go a long way to help in establishing a brand and creating outstanding brand awareness. But it is quite expensive, and you obviously don’t like to invest a considerable amount of money on it at the start of your business. Many free online tools will make things easier for you. Tools such as design hill logo maker can help you save a significant amount of cash when it comes to creating your logo and doing other things related to branding; this will give your startup a push.
The most amazing part of using the design hill logo maker is that you can design any logo by yourself in not more than 5 minutes regardless of whether you are logo design savvy or not. Most of your graphic design jobs such as brochure design, business card designs can easily be accomplished by using the different tools provided by design hill.
While starting up your small business, it is essential that you manage cash flow because it is a critical factor that is involved in the running and overall success of your business. Simply investing a considerable amount in any specific company is not enough to guarantee the success of that business. So whether you are starting with as much as a million dollars or you’re starting your business with as little as 10 dollars, it is essential that you are extremely careful and you weigh the risks and benefits involved in each investment you make. Take as much advantage of the resources and tools that are provided for free.
We hope that these tips will help you build up savings and also launch your small business. If you find them helpful or you have any comments or suggestions you would like to share with us, please do not hesitate to leave a comment in the comment section provided below.