You may think that emergency savings are purely for your personal life. At first glance, this makes a lot of sense. Covering for things like burst pipes, broken electrics, and unexpected accidents are all things we’re concerned about in our homes. But, what about businesses?
From covering quieter periods to funding well-deserved pay raises in your organisation, having a small pot of money to lean into can be a life-saver.
Read on as we cover the importance of having an emergency business fund, while explaining how you can get started on one of your own.
As the saying goes “always expect the unexpected”. If you need a helping hand with that, here are some of the more common unexpected circumstances that a savings fund can help with.
From opening new locations to developing new products or services for your customers, no business should be left on the back foot when it comes to innovation.
Of course, development and innovation come at a cost which can’t always be covered via your everyday business. Therefore, having a savings fund can be of great value – no longer must you rely on external funding to develop your business and stay competitive. With savings, the substantial cost of these endeavours becomes much easier to absorb.
Introducing upgrades to your existing technology and equipment is key to staying competitive in the market. Being able to offer services faster or more efficiently can mean the difference between receiving repeat business and losing out to more advanced competition, with upgrades being the deciding factor.
Business emergency funds can be tapped into to invest in a plethora of upgrades, from software to hardware and anything needed in between.
Retaining and acquiring quality talent is key to ensuring your business stays ahead of the market. One of the top ways of ensuring your team is happy and content is to offer desirable benefits, like training programs or healthcare packages.
Funding such benefits can be tricky, especially if such things aren’t currently on offer. But, with business savings, the ability to do so becomes much easier.
In particularly busy periods, it can be easy to quickly run out of stock or inventory. Not only does this introduce an operational block in the form of more time spent shopping around, but having fewer supplies can mean potentially turning away otherwise profitable work.
Keeping your stock plentiful is made much easier by a savings fund, ensuring a consistent operation all year round.
Every so often, regulations around business operations can change. From rules around environmental emissions and efficiency to substantial changes to importing and exporting goods, it’s hard to predict what will come next. Having savings set aside allows your business to swiftly navigate such changes without interrupting your usual operations.
Marketing campaigns require a lot of resources, both in personnel and financial. From devising campaign ideas to employing people to enact them and monitor performance, it’s a costly exercise. But, without promotion, your business will struggle to acquire repeat business.
Using your business savings to fund impromptu campaigns can make them much more manageable.
Inflation is a major obstacle to overcome in business. Every so many years, the price of goods, materials, and services escalates in line with the rising cost of living. Businesses that don’t account for this in their financial planning may find it hard to keep up with the rest of the market, leading to them becoming left behind.
Of course, different sectors will have different emergencies. Though, all can benefit from having business savings. Let’s look at two examples.
Tools, technology, and equipment are essential in the agricultural world. Heavy machinery is a necessary expense in the sector and, without it, profits come to a grinding halt.
From time to time, this equipment requires looking after, and such a thing can account for some heavy costs.
In farming in particular, there is always an element of risk from external factors that aren’t controllable. Weather conditions, for example, can greatly impact the quality and quantity of a crop yield, which requires careful consideration and risk management procedures such as insurance policies.
Although carrying an upfront expense, having such mechanisms in place can afford businesses the peace of mind that comes with knowing that their work (and profits) are protected in the unfortunate event of failure.
As your agricultural business scales, you may be thinking of expanding your services into another territory or making your current operation slightly larger. Whichever option you choose, the acquisition of quality land will likely be your starting point.
Having business savings for this purpose can be helpful towards things like deposits or lease payments, to enable your new venture to get up and running with minimal financial impact.
In construction, fluctuating material costs can make for a substantial expense in daily operations. Anticipating such fluctuations is difficult, which is why a business savings pot can really help soften the blow.
Such savings can be used to buy materials upfront at a reasonable price, helping take advantage of bulk discounts, and fighting back against inflation.
Safety is a common point of discussion in construction. Not only must your employees be adequately trained in common safety practices, but they require safe equipment to use every day.
Allocating a portion of your business savings to safety and compliance allows you to continuously provide training programs and protective equipment, helping your employees feel secure and comfortable when completing every task they face.
The level of quality control can make or break the success of any construction firm. From the site managers who plan and consider as much as possible during the design process, to signing off on residential properties post-completion, being able to stand by your work and guarantee its reliability is a benefit your customers will adore.
The fact is control is expensive – if issues are spotted, they must be rectified, which itself comes with a cost. Utilising business savings to help with this can help introduce and maintain a robust quality control system, leading to more satisfied clients in the long run.
Have you got a strategy in mind with your business savings? If not, we’re here to help. Visit our business savings page to find out more, today.