As a small business owner, you know how important cash flow is. Each month, enough needs to come in to cover your overheads and expenses. Ideally, you want far more money coming in than going out so you can make a profit and grow your business. But achieving that isn’t always easy, especially in today’s financial climate where rising interest rates, inflation, fuel costs and electricity prices are pushing your input costs higher.
Plan for the unexpected
Various unforeseen circumstances can impact your business’ performance, such as increased competition in the market, changes in consumer behaviour, seasonality or changes in regulation. Any of these factors can cause a drop in sales. To mitigate these risks, you should establish a business emergency fund.
The importance of having a savings pool became most evident during the pandemic, which had a devastating impact on many SMEs. Small businesses that had not set aside precautionary funds were often unable to keep their doors open. Practising the financial discipline of allocating a portion of your business income to savings each month can help you stay afloat, remain agile and manage unexpected disruptions.
Over and above the significance that savings can have during disruptions, there is another upside to saving – it can also form part of an effective growth strategy.
Power your growth with your own savings
Over and above the significance that savings can have during disruptions, there is another upside to saving – it can also form part of an effective growth strategy.
Having your own capital ready to invest in guaranteed growth opportunities, such as securing stock at the right time, makes solid business sense. As a small business, it’s important to look beyond today and set long-term goals, planning how you’ll fund them. Many of these future opportunities will require quick access to capital. Ideally, you should aim to finance this next stage of growth partly with your own reserves while leveraging business funding to seize opportunities that deliver strong returns. Think of your savings not just as a safety net, but as an investment in your business’s future success.
Maximise your business income by earning as much as 10% per annum with GoTyme Bank’s GoalSave >
The key to maximising your investment income is finding the right savings tool and the right business banking partner. GoTyme Bank is South Africa’s fastest-growing digital bank and as one of its banking clients, you can earn impressive interest on your savings – up to 10% per annum.
When savings aren’t enough, funding can fuel your next move
While building your own capital is vital, some growth opportunities can’t wait for your savings to catch up. That’s where the GoTyme Business Advance can help. This fast, flexible funding solution gives you access to up to R5 million, linked to your turnover and with no collateral required. Whether you need to secure stock, upgrade equipment or expand your operations, the GoTyme Business Advance makes it easier to act quickly and grow with confidence.