Owning your own business — it's the American dream? It also sometimes feels just like that — a dream. Ready to make that dream into a reality? You can totally do it. We believe in you.
Here, some tips to get your pile of cash started:
1. Figure out what your start up costs will be and create a cash cushion.
Before you start saving for your business, it’s a good idea to figure out how much your start up costs will be so you know how much you need to save to get your business off the ground.
By definition, your startup costs are the costs you incur as you set up your business. Examples of your startup costs are things like your business domain name, hiring a logo designer, your website development, your first batch of inventory, etc.
In order to get an idea of what your start up costs will be, do some research on your specific business, create a list of everything you think you might need, how much each item will cost and then tally it all up. If you can talk to another business owner to get some insights on startup costs as well that would be ideal. This way you can make sure you are not missing anything on your list.
It ‘s also a good idea to build a cash cushion of 3 to 6 months of business expenses to support running your business before you start generating an income. This way you don’t go into debt as a brand new business owner.
2. Build your costs into your budget.
Once you have a good idea what things will cost, you’ll need to determine how soon you'll be able to launch your business and then build your startup costs into your monthly budget. This way each time you get paid, you can allocate funds towards starting your business.
Building your business savings into your budget means you might need to cut back in certain areas and that leads into the next point.
3. Get creative with your savings.
In order to successfully budget and put funds aside for your business, you are going to need to get creative to ensure you are able to save the amount that you need to get your business up and running.
A few ways to save money could be by taking your own lunch to work, minimizing nights out for dinner and drinks, reducing on your cable and cell phone plans, getting a part time job, etc. Cutting back on some of your non-essentials will allow you to fund your business savings account as quickly possible.
4. Set up a designated business savings account.
To be successful in business you need to be able to track your business financials separately. So setting up a separate business savings account is a great start. Not only will you begin to separate your personal finances from your business finances, it will allow you to clearly determine how close you are to your savings goals because these funds are not mixed up with anything else.
5. Automate your savings.
Automating your savings makes the process of saving money so much easier! You’ll never forget to make a transfer and you are more likely to stick to your goal of saving for your business because your savings will be on autopilot. You can adjust the amounts you save each month via automation.