Smart savings tips for every small business owner

As a small-business owner, you understand the importance of cash flow. Enough needs to come in, every month, to cover your overheads and expenses. Of course, the optimal position to be in is to have far more money coming in than what needs to be paid out so that you make a profit, and your business grows.

But it’s not always that easy, especially in the financial climate we find ourselves in where inputs cost that little bit more, thanks to the ongoing interest rate hikes, inflation, the fuel price and cost of electricity, to mention just a few.   

Plan for the unexpected

Various unforeseen circumstances can have an impact on your business’s 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 was most pronounced during the Covid-19 pandemic, which had a devastating effect on many SMEs. Many small business that had not set aside some form of precautionary funds were unable to keep their doors open. Having the financial discipline to allocate a portion of your business’s income to savings every month will help you keep afloat, stay agile and deal with unexpected disruptions.  

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 to invest for growth down the line makes good business sense. As a small business, you should look beyond today and have long-term goals — and plan towards these.  It’s likely that many of your future aspirations will require funding. Ideally, you should aim to fund this next level of growth partly with your own capital rather than turning exclusively to credit options. Savings should be seen as an investment into the future of your business.  

Maximise your business income with TymeBank’s GoalSave

The key to maximising your investment income is finding the right savings tool and the right business banking partner. Take SA’s fastest-growing digital bank, TymeBank, for instance. As one of its business banking clients, you can earn impressive interest on your savings — up to 10% a year.

It works like this: you first need to be a TymeBank Business Banking customer. Becoming one takes just five minutes, and it can all be done online. Once registered, you can access the highly attractive GoalSave tool. It allows you to open up to 10 GoalSave “pockets” into which you can transfer money from your Everyday Business account. You immediately start earning interest, and the rate you earn increases the longer you keep your cash in these GoalSave pockets — just note that you cannot exceed R100,000 across all the savings pockets.  

Consider this: from day one you earn 4%. After 31 days this jumps to 5%. After 90 days the interest you’ll earn on your income is 6%, and, here’s the kicker: if your regular income is paid into your TymeBank Business account, and you give the bank 10 days’ notice on a payout, you can earn as much as 10% a year on your cash — now that’s making your money work for you.  

Creating savings pockets for your business is as important as it is for your personal savings. In a business context, consider things like VAT, marketing expenses, office rental and so on. Creating a GoalSave for each one of these financial needs not only helps you keep your finances organised — as each has its own “pocket” — you earn interest on what you put in too; the more you save the more you earn. It’s that simple.  

Keeping track of your money’s growth

When every cent counts, finding opportunities to earn more money is a no-brainer. By being smarter about how you structure your business’s income, and how you organise it using a product like GoalSave, you can manage your money and gain the benefit of compound interest. Now that’s smart business banking. And it’s all available from TymeBank.  

This article is sponsored by TymeBank.