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Many business owners believe they should choose between saving money and achieving business growth with savings by reinvesting back into the business.
It’s easy to see why, when growth often requires reinvesting profits into marketing, hiring, or new equipment. But what if you could do both?
With the right strategies, you can build a solid savings plan while continuing to scale your business.
Start by defining clear savings goals alongside your growth targets. For example, determine where you want your business to be financially by the end of each quarter or year. A realistic plan allows you to allocate funds effectively, balancing reinvestment and savings.
Keeping personal and business finances separate is essential, especially for small business owners. Separate accounts simplify bookkeeping, improve tax reporting, and make it easier to track savings and spending patterns. It also prevents you from potentially relying on personal income to get your business out of financial problems, ensuring clearer boundaries and financial stability.
Unexpected expenses or slow revenue periods can strain your cash flow. A cash buffer ensures you are prepared for these situations without dipping into savings earmarked for growth. Aim to set aside at least three to six months’ worth of operating expenses in case of an emergency or a downturn in the business.
Cloud-based accounting software, like Xero, can automate savings transfers and reduce manual work. Automating processes means your savings grow in the background, and you can focus more time on scaling your business.
Growth doesn’t have to follow a straight path. Market changes, unexpected opportunities, or challenges may require adjustments to your plans and goals. Regularly reviewing your financial strategy and savings goals helps you keep them aligned with your business growth. Changing your goals isn’t a setback, it’s being realistic and seeing the bigger picture to help you achieve your business goals!
Partnering with a small business accountant can make a big difference, particularly if you’re looking at building business growth with savings. Professional advice helps you identify areas to cut costs, maximise tax benefits, and create a savings plan tailored to your business. Building a community around you, including financial advisors and business mentors, can also provide valuable support and accountability to help your business thrive.
You don’t have to figure it all out alone. Whether you’re just starting your business, or looking to scale further, working with a financial expert can simplify the process and help you stay on track.
The Valorium Advisors business philosophy revolves around more than just the numbers. We look at the bigger picture and understand that starts with you.
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