Business growth is an exciting accomplishment, but the task of getting to the point of expansion can seem daunting. Whether you’re met with unexpected expenses or you just don’t have a budgeting strategy, it can leave you feeling stagnant. Let’s dive into balancing expansion while staying financially secure.
Managing a budget for your business that lends itself to both savings and growth is essential to a business’s long-term success. A common practice is to allocate around 10-20% of your income towards savings. This can be tricky depending on where you’re at in the growth and expansion of your business. Focusing on what you can do, like managing expenses, will help navigate a savings amount that works for your business.
Understanding your business goals will help you tailor your saving strategy to best meet your needs. If you have a long-term savings goal, a Certificate of Deposit may be the perfect product to put your money into as it can be out of sight, out of mind. If you are looking to have more access to your money at any given time, a money market account, or savings account, such as our Prime Time Savings account, that earns a higher interest rate would be ideal. Tricks such as having a set amount transferred to a savings account once a month can help automate your saving and be one less thing to think about.
Growth in business isn’t always linear and unexpected needs can arise. If you find that your business needs are changing rapidly and your savings account can’t keep up, consider a business loan. While getting a loan may seem like the opposite of a savings strategy, you will reserve what you do have in savings for time-sensitive projects or emergencies. You can continue to contribute to your savings account during this time as well.
At Mid America Bank, we pride ourselves in partnering alongside your business. Not only can we assist you with a savings strategy, but we can provide many other tools and resources to help you on your business growth journey. Reach out to me or the team at our new Columbia location any time to talk about your goals for growth!
