#24 How do I save more in my business and when should I invest?
Do you want to start saving more money in your business but are unsure of where to begin? The struggle is real, my friends! Today we are talking about how to start saving in your business, a couple of super easy ways to get started, and how to ramp up the momentum without feeling a huge pinch in your operating budget.
We’ll also be talking about some guidelines for spending in your business and how to know something really is a “good” investment.
Are you ready to see the balance in your business savings grow rapidly?
What we’re talking about
- Getting Started Saving Without Feeling the Pinch
- How Do I Know What to Invest In?
- Sticking With It
Getting Started Saving Without Feeling the Pinch
First of all, not everyone is able to save in their business. And that’s TOTALLY okay. One thing that I hate about general financial advice is that it doesn’t take into account our unique socioeconomic position. If you aren’t able to save in your business right now, there’s no shame in that. Focus on covering your operating expenses and paying yourself and revisit saving when you’re ready.
But what if you are ready to save? How do you get started?
The first thing you need to do to save more in your business is to make savings a priority. Real talk, it’s super easy to spend money in your business. So in order to save, we need to make it one of the most important things to our business finances.
One way to start prioritizing savings is by understanding the impact of saving. This goes beyond, “Having money to buy X” or “So I have a business emergency fund.” What’s the impact of these things on your life and business? How does savings help you live in alignment with your financial values?
Next, automate your savings. Automation makes savings easy and circumvent our not so healthy money habits. There are a few ways you can do this.
The easiest way to automate your savings is recurring bank transfers. When setting these up, consider your cash flow. For many people, it’s easier to have more frequent automated transfers in smaller amounts. For example, if you want to save $400 per month, then a weekly transfer of $100 may be easier to sustain than a one time $400 transfer.
You can also use an app like Qapital or Digit. With Qapital you can set up rules to save based on certain triggers. Digit analyzes your cash flow and spending patterns and determines what it’s “safe” to save. I use both apps and they have seriously helped me level up my savings game because they save small amounts of money (which can be virtually unnoticeable) on a frequent basis.
How do you create more money in your business to save? Here are my favorite techniques for savings:
- Create a small digital product and funnel all the revenue from that product to your savings
- Do a spending audit, reduce unused expenses, and funnel those savings into your business savings
How Do I Know What To Invest In?
So how do you know if something is a worthy investment in your business? How do you know it’s worth the financial risk? Here are some questions you can ask yourself:
Will this investment make running my more efficient? Will it save me time? This could be directly related to the service you perform, how you market your business, or how you acquire customers. If the answer is yes, then write down how much time (or money) the purchase will save you and get specific about the benefits you expect from the purchase with real numbers.
Does this person/hire know more than me or is more skilled than I am about X? Basically, are they smarter than you when it comes to whatever you’re hiring them to do? If they are, then you can put the time you’ll save not having to learn the skills back into building and expanding your business.
Does this align with my values? When we spend money we’re making statements about and commitments to the things we stand for and believe in. You should invest when it aligns with your core beliefs about what you want to see in the world.
For example, Rachel Rodger’s hosted a Townhall called Reimagining Small Business about how small businesses can bring anti-racism practices into their business. One of points on the Anti-Racist Small Business Pledge presented in the town hall was to invest 30% of your operating budget into Black-owned business.
This is a perfect example of investing with your values and how to lead with your values when it comes to investing in your business.
Sticking With It
Saving for your business is a noble goal, but one that may feel like an insurmountable feat for a business owner, especially in these uncertain economic times. If you’re emotionally tuned in and tied to the why of the reason you’re saving, you’re more likely to pursue the task, and follow through with it. Allowing you to watch your savings balance grow, without reservations.
Are you ready to see your savings balance go up without feeling the pinch?
Note: This post contains affiliate links to products that I use, know, and love! Affiliate links mean that if you sign up for something through my link I receive a small commission. I only recommend products that I have tested, use for myself or with my clients.
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