How to Start Saving as a Business: A Step-by-Step Guide to Financial Security

How to Start Saving as a Business: A Step-by-Step Guide to Financial Security

Running a business means being constantly on the move—investing, growing, and reinvesting your profits. But amidst all the hustle and bustle, one thing is crucial: ensuring that your business’s bank account is well-funded and prepared for whatever unexpected challenges come your way because they will. 

You can't always predict when a customer is going to request a refund, when there will be an economic downturn, or even an explosion in the breakroom (okay, maybe not an explosion, but you get the point). The reality is, things will go wrong, and you need to be ready for it. Here's how you can build up your business’s bank account and sleep well at night.

1. Start by Becoming a Saver, Not Just a Reinvestor

Many entrepreneurs fall into the habit of reinvesting every dollar they earn back into their business—after all, that’s how growth happens, right? While reinvestment is important, it’s essential to create a cushion for your business to weather the storm when things go off track.

As Morgan Housel, author of The Psychology of Money, says:
“Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.”
In other words, things won’t always go as expected, and having a savings account for your business will ensure you're prepared for the unexpected.

2. Create a Separate Savings Account for Your Business

The first step toward building a financial buffer is to set up a dedicated savings account for your business. As accountants, we get to see the insides of many businesses and you'd be shocked to know how many entrepreneurs don't separate their business and savings funds. Having only one bank account that everything flows into (and right back out) makes it astronomically harder to track savings goals. It's simple, and it's free. Create a new account specifically for savings to keep things organized.

3. Set a Tangible Savings Goal: $100,000

While financial books might recommend saving 3-6 months of expenses, that goal can feel overwhelming. Instead, set a simple target—let’s say $100,000. It’s high enough to feel motivating, but it’s also achievable over time.  Having a clear, specific goal like this makes it easier to stay focused and build momentum. When you have a target in sight, it helps you take steady steps toward financial security, and before you know it, you’re closer than you think.

4. Live on 99% of Your Income and Save 1%

The next step is simple: Start saving 1% of your income each month. If you're a $250,000-a-month business, that’s just $2,500 a month. This small amount won't be noticeable in the grand scheme of things, but over time, it adds up.

This practice of saving 1% will help you build "savings muscle." The key here is consistency. Once you’re comfortable saving 1%, gradually increase it. Aim for 2%, 4%, or even 10% as your goal. The important thing is to keep increasing it until you reach your target.

5. Find Hidden Money Leaks in Your Business

You may be surprised at where you can find that 1% to save. One common area businesses leak money is through auto-subscriptions—those recurring charges for software or services you’re no longer using. Take a look at your business expenses and identify areas where you can cut back to free up that 1% for savings.

6. Make Saving Fun

Here’s the reality: Saving money isn’t exactly thrilling. But if you want to build a savings habit, you need to make it fun. Set a visual goal like a thermometer or a paper chain in your office. I have personally done both of these things and it works! Each time you reach $1,000 in savings, add a new paper link or color in a new section of the thermometer. Sure it may sound silly, but there's power in visuals. Let's face it, you aren't an expert in saving money or you wouldn't be here right now. So keep it simple, make it fun, and celebrate your progress!

7. Take 30 Minutes to Start Saving Today

One of the biggest challenges for entrepreneurs is finding the time to sit down and plan their savings strategy. But trust me, if you dedicate just 30 minutes today, you’ll be able to identify areas in your budget where you can start saving. And yes, it does need to be today. Act while you've got the momentum. The secret is in taking small, actionable steps toward financial security.

Be Ready for Anything

Plans change. In both life and business. Having a clear savings plan will ensure that you’re ready for whatever comes your way. Your plan might not go according to plan, and that’s okay. What matters is that you’re prepared.

Ignite Spot Accountants are trained experts at helping businesses save money and I'm positive that we can help you reach your goal. In fact, we're offering a free saving session with a live accountant to review your accounting file and help you discover where to start. Click the button below to schedule your session!